I am very new to adsense so please excuse this noob question I keep hearing that the revenue is a product of the CPC and CPM. Now what happens if no one ever clicks on the banners but i get a HUGE amount of visitors. This would count only as CPM I guess. Will my revenue be high just through CPM with no or very few clicks? Can anyone explain this to me?
CPM and PPC ads are mixed together. The algo that Google uses determines which is performing the best on your site and on their network. If a CPM ad is performing better (or paying better), it will show up first. Vice versa, if a PPC ad is paying higher or performing better, it will be displayed first. to answer your question, you could get 1 billion clicks and still only get $1 (if the CPM is very low), but you could get 100 clicks and get $200, just depends on your site's content and how the Google AdWords network is feeling.
Most Premium sites get HUGE amount of traffic like 1 million visitors a day. If no one clicks an ad the publisher still makes a ton of money with CPM = pay per thousand views. If their CPM is $.50 they make $500 a day which equals to about 15G a month. Remember $.50 is on the low end of what publishers earn in cpm.