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You have to sign up for Google AdSense. You must have your site already up before you sign up, your site will then be evaluated by Google to see if its working right, etc.
Once you've been signed up you will be able to login and then from there you can decide the type of ads you want. Those include the text ads at top, a search function, or referels like those for Firefox or a Google package.
Once you've selected what you want you'll then be given a piece of code that you place into your sites code. You can not modify that code in anyway. There are also a number of other rules that you will want to read carefully.
Just so you know, you dont exactly make a ton of money off of these things. To give you an example, lets say you get 600 page impressions (times a page is visited on your site) and you get 10 clicks on the actual ads (2%, pretty common average) for that day you'll make a little under $5. Also, you make MUCH more money from clicks, you can get a ton of impressions but they're worth nothing really without some clisk thrown in, so that's where placement comes into play.
That's a pretty much a break down of the whole process. You will have to fill out tax information, and if you make over $600 a year from it you will have to pay taxes.
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