Basically, it's making money with AdSense that you feed back in to advertising with AdWords. If you make more as a publisher (e.g. 10 cents per click) then you invest as an advertiser (e.g. 5 cents per click) then you're in profit. Google doesn't really approve of this strategy.
Kind of outdated technique of buying traffic for a site and hoping you earn more on PPC than the traffic cost. Using AdSense however you will almost certainly be banned.
Adsense arbitrage as CountryBoy kindly explained is something you don't need to know about because its golden days are long gone..