Forum Moderators: skibum
See the separate Google AdSense forum on WebmasterWorld.
You put some code, basically provided by Google but customizable, on the page or pages where you want the ads. Google serves ads based on the content of the page.
If one of your visitors clicks on the ad, you get paid--anywhere from a penny to a few dollars.
That's the basic idea, but you can read more about it at Google.
People rave about it because it's so easy to put in place and it pays very well. Better than banner ads, better than popups, much better. And often better than affiliate marketing.