A good rule of thumb regarding illegal clicks would be that if that click isn't one made by a visitor to your website who happens to be interested in the actual products or services being advertised on your website, it is likely to be fradulent. "Visitors" exclude those who have a vested interest in having the advertisement clicked on.
Illegal clicks 1. Clicks that are made from your own PC. My theory on how they detect invalid clicks - cookies - IP - OS - screen resoultion - hardware information (hard disk serial number, processor, memory, monitor, etc.) - telephone number (if using a dial-up) 2. Redundant clicks Example: If someone is "click bombing you", G will imeddiately detect it and you will get no earnings. If you are doing it let's say you visit tons of internet cafe everyday just to click your ads, G will see a trend and ban you for it. Bottomline: Don't cheat! Google knows.