Nikolas says:

Affiliate marketing is an Internet-based marketing practice in which a business rewards one or more affiliates for each visitor or customer brought about by the affiliate’s marketing efforts.

Affiliate marketing is also the name of the industry where a number of different types of companies and individuals are performing this form of Internet marketing, including affiliate networks, affiliate management companies, and in-house affiliate managers, specialized third party vendors, and various types of affiliates/publishers who promote the products and services of their partners.

Affiliate marketing overlaps with other Internet marketing methods to some degree, because affiliates often use regular advertising methods. Those methods include organic search engine optimization, paid search engine marketing, e-mail marketing, and in some sense display advertising. On the other hand, affiliates sometimes use less orthodox techniques, such as publishing reviews of products or services offered by a partner.

Affiliate marketing—using one website to drive traffic to another—is a form of online marketing, which is frequently overlooked by advertisers.[citation needed] While search engines, e-mail, and website syndication capture much of the attention of online retailers, affiliate marketing carries a much lower profile. Still, affiliates continue to play a significant role in e-retailers’ marketing strategies.

Reggie S says:

If you look @ most retail websites, you’ll see a "Join Affiliate" link at the bottom of their page. When you become an affiliate to a site, you push their products via a website or blog. For example, you’re an affiliate for Amazon and you write a review about one of their products and then link back to the product from your website (the link is provided by Amazon after you join their affiliate program so they know where it came from).. everytime someon clicks on the link from your website to Amazon and then buys the product, you will get a commission of up to 15% of the product price. You never have to buy anything or pay to join affiliate programs.

I just recently joined UniqueLeads’ affiliate program where I can place ads on my website.. they seem to have the best payouts and have a great support system to help you.
http://affiliate.unltracker.com/rd/r.php?pub=200006&sid=32

And yes, you could make a good supplement income with affiliate programs, some people even make so much money that they do it full time. I personally make around $1000/month extra with affiliate programs.. and thats working around 10/hrs/month. Good luck!