Clickbank is essentially what is referred to as an Affiliate Service Provider. Clickbank is a marketplace of digital products like software and ebooks. All of these digital products are owned by various merchants who sign up to Clickbank as a vendor. In turn Clickbank displays all these merchant products in their marketplace as well as handle all the payment processing.
This is pretty much how the sales are handled :-
Buyer -----> pays Clickbank (online via credit card or paypal) -----> Clickbank pays you (every 2 weeks via cheque)
You can either sign up as Clickbank as an affiliate or a merchant. If you've got your own product then you would sign up as a merchant, post your product on the Clickbank marketplace and sell it on your own or simply rely on affiliates to sell it for you.
If you don't have your own product then you'd sign up as an affiliate (like me) and sell other merchant's product. For now I will talk about selling other people's products as an affiliate as its the best place to start. As an affiliate for every sale you make Clickbank will pay you a certain percentage of the sale. This percentage is decided by the merchant and if you access the Clickbank marketplace you'll be able to view the percentage paid out to affiliates.
Although there are a lot of other Affiliate Service Providers other than Clickbank, if you're just starting out with affiliate marketing then I would suggest starting with Clickbank. They've got the biggest collection of digital products in various categories ranging from Fun & Entertainment to Money & Employment. What I like about digital products is the high commission percentage paid out to affiliates ranging from 50-75%. Amazon, for example pay you a measely 10-15% as most of their products are physical products that carry production costs.
To start promoting Clickbank products you need to sign up with Clickbank (its free!).
A little about Adwords then....
I'm not going to go into a lot of detail about Adwords but just a short introduction to what its all about. Adwords is basically a pay per click advertising program. Once you sign up (Google charges you a $5 activition fee) you specify the amount you're willing to pay for that specific keyword and write your ads. Everytime that keyword is searched for on Google, your ad will be displayed and everytime someone clicks on it Google will charge you. That's pretty much it!