Adsense is a pay per click, and pay per impression technology. While it may be alternating per impression and per click, be assured that google is trying to get you maximum profits as google gets a hefty percent of your success. CPC basically means cost per 1000 impressions. Advertisers often use that instead of pay per click.
While it may be promissing to click yourself stupid all day, google has this covered. Your account may be permanently suspended if you use IP cloaking and different techniques to get unique IP and host clicks. If it gets too many clicks at once or from the same person in a day, it'll block you for the rest of the day. Google knows a bit about the psychology of the spammer, so when it means loss of revenues, they know what they're doing.
If you're on a free host, chances are you already have ads. Google is less likely to accept you. If you don't get much visitors in the first place, throwing ads at them won't make them come back faster. More ads = less people over time. People prefer sites with no ads. If you want a free host with no ads try our best free web hosts guide or if you want to pay a little more for better service try our finding good paid hosting guide. If you're getting decent traffic, it may be worth it to add visitors, but in the long run, ads means less people.
In general images make more money, because they're more distracting, but a well embedded, well positioned text ad can also earn high click throughs. Image ads have two problems: they're too distracting and people don't like them, and they can easily be blocked by repeat visitors, unlike the text ads.
Aside from Google Adsense There's also Yahoo Parnership Network, adsonar, double click, Falkag, Casale Media, and many others.
Of course each company will say it is superior. Try each to see how they pay off. You may not be accepted to some.