Buying Adwords (or similar) ads for your web site that is displaying Adsense ads. The idea is that you earn more money from the clicks of those visitors on your ads than the cost of the clicks for traffic through the ads. It's currently a risky strategy because Google is trying to limit the practice, so odds are you would spend more on Adwords than you would earn through Adsense, making it a loss.
If you are going to spend money in PPC to earn something with adsense it may be better to drive traffic to your adsense website using another PPC program (e. g. some PPC publisher's network). Since there is a big competition in google adwords using another PPC company to drive traffic to your website may lead to lower PPC prices and it means higher ROI.
It still works, people still do it but it's not easy and you do stand a chance of having your site banned.
You buy traffic from other ad companies and hope that you earn more from your Adsense ads than you spend on the ads. Google bans accounts for this.
Adbrite usually performs with that range but Google bans you in 2 weeks maximum and you lose all your earnings. (trust me, I've tried )
AdSense arbitrage means bidding for advertising on Google AdWords or any other network at very low "per click" prices, then directing that traffic to a site designed with the primary purpose of having the visitors click on the similar advertisements but those a much higher bid price, sourced through AdSense. It will ban you from Adsense if you don't know how to use it wisely.
You are mistaken. If you know how to use it well this is one of the best method to earn money from Adsense. It depends on the quality and method in the ebook.
Some people are successful in this arbitrage method. i am NOT surprise that already some of us here are making nice income using arbitrage... But of course there is a risk of using this method.. Well no pain no gain..