We run a whole campaign for a website off adwords and generate about 200 clicks a day. It's pretty cheap and we're generating 2-8 sales a day off it with it being our primary source of advertising. Semi targeted keywords generate .5% or less, very well targeted keywords generate 2% click through rates. For example, we might get 50k impressions per day and get 200 clicks out of it.
You asked how they make money? Well it's very very simple. For keyworsd that you would generate a lot of clicks on...such as if you're selling online books amazon.com. They disable your keywords and say you don't get a .5% click through ratio. Then, they make you buy keywords such as cheap books or amazon books which 100 other sites buy and make you pay 2.00 a click for the same keywords. Effectively making it so instead of paying 3.00 for 300 clicks you now paid 200.00.
Also, I've noticed that when you disable the expensive keywors...your low click through rate ads get disabled quicker.
I voted 4-10 times a day as we actually click our own ads to keep the click through rates high on our good keywords.