Yes - for good or bad, I spend a fair amount on it every month.
They do work - not necessarily on the first clickthrough though - they may be just browsing and come back later for buying/contact.
There are loads and loads of SEM (search engine marketing) and SEO (search engine optimisation) companies out there. It's a competitive albeit growing market. Web analytics (ie knowing what works) is a whole section of the business again.
There's a lot of BS around it as well. You don't actually have to that technically clued-up to get reasonable results. It's as much about legwork in thinking about how people look for things and why they might be looking. I managed to get a (somewhat specialist) site up from nowhere to first page on Google with just a few sensible tweaks to the content. (Not on adwords, just content)
There's several internet marketing trade shows every year - open to any bona fide individual (ie don't say you're a student!) eg see Internet World
AFAIK, Google fixed the multi-click problem. I was told you should only get charged a max of 2 clickthroughs per ad from any IP address. Not sure how that works with multi-PCs through 1 IP conntection though.
Codders - I just can't believe you don't look at them with the amount of time you spend online!!!!!!!?????
Good luck to your pal if he goes for it.