It describes a method by which an end user accessing the Internet via a wireless access point (WAP) would be served advertisements based on factors such as the geographic location of the WAP, a behavioral profile of users of the WAP, the vertical market served by the WAP’s owner, or other predetermined criteria.
Smart move by Google. Offer free wi-fi and support it using AdWords. It will be interesting to see how they display the ads. A welcome screen when you first connect is the obvious choice, but most people would simply skip past that. Maybe some kind of frame at the top of the page with contextual ads or perhaps using the AutoLink feature to add ad-links to certain words on the page.
We’ll just have to wait and see.