Conversion depends on a number of factors: The keywords you are targetting, the competition, and the bid you are making. Then, after someone clicks on your ad, a few other factors come into consideration: The design of the site/page on which the user is landing. Did the user get what (s)he was looking for? (For example, you can make the user land on the home page of your website, or on a page which has a form, or products that you are trying to sell). Making the user come on the page which will convert the user to a customer is very important in improving conversion rate from Adwords.
I'm getting 1/10 rates for quite a few programs... AdWords converts extremely well. The issue is the cost per conversion is quite high compared to the alternataives, but it's the only one I can think of that delivers true volume in a PPC environment.
I currently have one search campaign running that's getting a 20 - 30% conversion rate, however it's a low-click-volume term. On larger volume terms for other campaigns, I see around a 2-6% conversion rate. However, I've had other campaigns come in under 1/2 percent conversion rate. It's all about optimizing your campaign - If you're willing to sacrifice a bit of volume, you can bring your cost per conversion down to where you want it.