In a pay per lead Program, the advertiser pays you for leads you generate at his destination site. if you want to use SEO instead of PPC, you basically have to optimize your website for keywords related to the product of the affiliate program that you are promoting, the goal is to convert the traffic into leads and get paid by the advertiser.
Lead Generation is basically nothing but converting your visitors into your customer through various medium like ppc, seo, email marketing or affiliate marketing. I.e you get order for seo through your website's contact us form.