i just read a post on a blog that said this is a great method to have high CTR's and low CPC's because no one is targeting the spanish market. what are everyone's thoughts on this?
It depends on the product! The spanish market is not so exploided as UK/US etc. (Also the site needs to be in Spanish )
follow up question: do i need to translate my website into spanish as well? does that mean i need to have a separate domain? what if i just translate my adwords campaign into spanish...but leave my landing page in english?
You do need to translate your site into Spanish otherwise you will end up getting clicks from people who only speak Spanish and who will not convert. You do not need a separate domain. If you have a lot of content to translate I would just use google translation to test the waters, if you are getting a cheap clicks then translate your site properly.