Does Google actually pay anyone when users sign up for AdSense after clicking the "Ads by Gooogle" links on top of every AdSense? I thought about this when I heard that AuctionAds.com has this kind of affiliate system built right into their ads, which is cool for webmasters...

You need to have gmail account and a site. You can create a blog if you don't have any site. Just sign-up to blogger, it's free and right there you can create a blog instantly.

How old your blog is? Try to update timely and increase the no. of posts in blog. After generating good traffic Google adsense become beneficial for money making.

Publish your blog, with Blogger , post some articles and waiting for Google approval. Keep patient

Signup in blogger which is free and can create blog. u should have gmail account and a site to creat a blog for

Go to http://google.com/adsense/ and register your website.

Check out enchone.com/how-to-register-google-adsense Hope it helps you to understand better.

I don't think they are still accepting free blog applications (blogspot etc) for adsense accounts.

I suggest you register a domain and start a website (wordpress blog easy with Fantastico) on a good niche and daily update it with a couple of posts. In a couple of months (2 or 3) once you are getting some good traffic then you can apply for adsense account.

Google must have provided the reasons as to why they have not approved your application. refer their points, understand the make the required changes/actions and then resubmit the application.