Lots of the companies I'm affiliated with have ugly banners. I was wondering if I could make my own banner and put their tracking link in it would it still work?
I wouldn't try it unless I got permission from the vendor. Read your affiliate agreement with that particular,company. It will usually state that you cannot change anything about their links, at least with CJ vendors.
Most advertisers have started doing spot checks on the representation of their brand on affiliate sites (UK) mainly due to the ASA monitoring online advertising. You can still put your own banners in front of the links as long as this is not specified in the terms and conditions of the advertiser but I wouldn't recommend it without permission first.
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