This is taken directly from Google's AdSense website:

"You can maximize your revenue potential by displaying Google ads on your website. Google puts relevant CPC (cost-per-click) and CPM (cost per thousand impressions) ads through the same auction, and lets them compete against one another. The auction takes place instantaneously, and, when it’s over, AdSense automatically displays the text or image ad(s) that will generate the maximum revenue for a page -- and the maximum revenue for you."

Impressions are any time the page is viewed, and clicks is anytime one of the ads is actually clicked on. Most of the revenue will come from clicks rather than impressions, I think.

Please keep in mind under the Google AdSense terms of service you should never try to get people to click on the ads or trade clicks with others, as this would be click fraud and could get your AdSense account terminated.

Hope this helps!