I have about 2,000 subscribers for my youtube videos, and someone I know mentioned something about using Google Adsense on youtube, how does this all work and what do I have to do to get started?

You have to register to be a youtube partner, then you give them your adsense details and then if you are accepted the adsense adverts appear to the right of the movie player and also along the bottom of the player.

In your adsense account you will see a youtube section, which tends to remain blank, but you can see your youtube earnings in the AdSense for Content Host dection.