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You apply and once you get approved, you can put in the Adsense code in your site. Here are the instructions on how to add Adsense codes on your site https://www.google.com/adsense/support/bin/answer.py?answer=10192&topic=8434
You earn through various ways:
1. Pay per click - this is the common way to earn which is you earn every time a visitor clicks on your ads
2. Pay per impression - an advertiser can specifically target your site and show ads where you earn via cost per 1,000 impression (e.g. you earn every time someone sees your ad, even though they don't click on it)
3. Referral - you can also earn if you refer a visitor to use Adsense or Adwords, download the Google toolbar, etc.
IS IT WORTH IT AND HOW MUCH MONEY PER MONTH DOES IT BRING IN?
Some sites do very well with Adsense (even in the millions of dollars a year) while many more sites do extremely poorly with the program (can't even earn $10 a month). One of the misconception people have about Adsense is they simply slap it in their websites and it will automatically earn them big money -- which is not true as evidenced by the many disgruntled webmasters
Your income will depend on:
- the topic of your site (if you have high paying keywords you stand to earn more)
- responsiveness of users to ad (are visitors coming to your site with blinders in their eye or do they look at the ads as additional complementary resource)
- traffic (you earn more with more traffic, even if you have low paying keywords or other metrics)
- how you implement the ads on your site (some positions and colors work better than others)
I suggest you join the program (you've got nothing to lose as it is free) and see how your site will do with it. I've been with Adsense since June 2003 and it's been a GREAT income generating program for us. So for me, Adsense is definitely worth it
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