Don't like to read a lot of text? Watch this 4-minute video on how AdSense works.
And now for the text version of how AdSense works...
If you go to Google.com and do a search for almost any keyword phrase, you'll notice some "Sponsored Links" that appear on the right side of the screen that are relevant to the keywords you just searched for.
Website owners pay Google to display these ads and are charged a predetermined amount every time their ad gets clicked by a web surfer. With the AdSense program, you will display these same text ads on your site just like Google and get paid for it as well.
All you do is copy and paste some provided HTML code into your pages and Voila! the ads will show up. Every time an ad is clicked on your site, you will receive a certain percentage of what Google receives from the advertiser.
Once your account reaches $100, you'll receive a check in the mail.