My longtime buddy started a website a few weeks ago. And started making really good money. So I said hey shoot me over your keyword list, im gunna jump on this bandwagon too. I build an awesome site, totally relevant. Start my campaign today and out of 784 keywords I bid on.... they all say "Bid is below first page bid estimate of $10.00" What!? I can understand for a few... but all 784 keywords? I know my friend is only paying about 45c a click. And I did start my bid out at 90c just to get it going..... but at $10... no one would ever make a profit.. The ads havent even run.. Whats up with that>?
What is your QS for each keyword? Could be a number of things. Check this post: http://adwordsoz.blogspot.com/2008/10/quality-score-checklist.html for what you can do to improve your QS.
Basically, your campaign stinks, I'm sorry to say. You need to improve your quality score. Search DP and Google for quality score tips and you'll find loads of information.
You (generally) shouldn't have 784 keywords in one Adgroup, but you can have as many as you like in a campaign. I've got plenty with 10,000+. You don't get penalised in any way... If you've got a page one bid of $10 immediately, the most likely cause is probably your website. Google give you some good guidelines here: http://adwords.google.com/support/bin/answer.py?answer=46675
Your quality is not good overall. Work on your landing page, your ad group structure, your keyword/ad relevancy as well as your ctr. I bet its because you dumped 700 keywords in 1 ad group. You must make sure they are grouped very tightly, and also add substantial content to your landing pages that you are using.
They looked at your account and gave it an "auto slap" because it was set up wrong. Now begins your journey of trying to figure out what they want and they don't tell you exactly, you have to figure it out on your own.
yeah i figured out what it was. It was an include file that was making the page hangup. Once I fixed the issue, everything was dandy! Phew!