Traffic arbitrage is a system whereby you purchase clicks on one PPc network and send the traffic to another site where you are running other ppc ads.

For example you would run a PPC campaign on Miva where each click for the keyword term "Mortgage Refinance would cost ot 5cents that click would take the customer to a highly optimised site where you have adsense and each click there pays you $1 on average.

Thats a very simplified explanation as you need to factor in click through rate on the landing page etc.

My previous experiments have been semi sucessful but not sucessful enough for me to want to persue it on a larger scale. a $100 campaign would return me $110. Not bad but it didn't give me enough room to experiment to much as 1 days losses could wipe out a weeks profits.