There are so many diff meanings for words and phrases I can not see how G could ever hope to theme links with any consistancy.
IMO Joey you have hit the nail on the head, but there is an answer and that is LSI (latent sematic indexing) which compares millions of related pages and in the process notes that sites that are about Lincolns use the word cars a lot and so do the sites about Chevvys, and Fords and Mustangs and thus concludes that there is some relationship. When you do that with lots of words (think about words like brakes, tires, paint, upholstry, engines, mpg, etc) then you have more and more correlations. This is how CIRCA, which Google uses to determine the theme of pages that display Adsense ads, works and its pretty good, but IMO its not fast enough to be used real time, and at any rate Googles use of it in the main algo would necessitate the storage of many times more data than they have to store now.
I would have thought the same thing........... However -- It doesnt appear to work that way (at least for cars) 95% of my adsense ads are specifically for lincolns and cadillacs - not brakes or tires (unless its Lincoln Brakes) This holds true on numerous other sites similar to mine I have looked at.
I think you have misunderstood Joey, CIRCA determines the theme of a page (the fact that they do it by examining many many sites and comparing many many words that all use could be ignored for the moment) in order to determine what ads to serve for that page. So when you see your ads on a page they should be appearing only on pages which are car related as determined by CIRCA, if car is one of the keywords you have chosen. The fact that they recognize that its about cars because they find that both chevvy and lincoln pages both talk about brakes for instance does not mean that the pages are going to be brake pages or that the ads are going to be brake ads.