Shiva Shivakumar (Director, Google Kirkland) who "led AdSense through beta, launch and hypergrowth" gave a talk at University of Washington Computer Science called "Google Ad Systems" (video available).
The talk is a light introduction to AdWords and AdSense. It mostly covers the history of the products with some brief discussions of the challenges around relevance, scale, optimal auction pricing, and click fraud.
The talk is worthwhile, a good overview of the work involved in building a system like AdSense and AdWords.
I tend to follow this stuff fairly closely, so the only thing that was new to me in the talk was hearing that AdWords is still running on top of a massive MySQL deployment. AdSense, in contrast, is running on top of the Google data infrastructure, GFS and Bigtable. Shiva was not clear about whether the difference was merely due to legacy issues or whether there is something special about the AdWords data access patterns that makes MySQL preferable.
Shiva's talk unfortunately only touches briefly on auction theory and click fraud issues. If you are interested in more details there, you might dive into Jan Pedersen's talk and a related paper I discussed in an earlier post.