Problogger.net has a recent post entitled How Bloggers Make Money From Blogs. Mostly it's a list of a bunch of companies that have advertising widgets you can add to your site. Then there's a bunch of esoteric ideas like "become a consultant" and "write a book," but mostly it comes down to adding widgets to your site.
Here's how to do that:
Go to Amazon and create a widgit that lists products the readers of your blog might be interestedin. To do that sign up for the Amazon Associates program here.
Next, sign up for Google Ad Sense, which drops related text ads on your site and pays you a pittance for the honor. If you do some serious traffic, you can make some serious money. Most people make pocket change, but hey, that's pocket change you didn't have before. To do that:
1. Look to your upper left for the TAB called LAYOUT. CLICK LAYOUT
2. CLICK ADD GADGET
3. From the list of Gadgets here, select the + symbol next to AD SENSE.
Add this Gadget to your site. While you're at it, explore the other gadgets there. To navigate back to your blog post, or to the place where you can create a new blog post, CLICK DASHBOARD.
That's all there is to it.