We're doing Adwords, plus a couple of other pay-per-click services. We spend about $500/month with Adwords, and haven't had trouble finding keywords to sit on for about $2-$3 (we avoid competing with our customers for keyword placement, which rules out a large pile of really expensive hosting-related terms)...keywords are expensive and getting moreso from adwords, so I'm putting most new spending on other options.
AdBrite is pretty good. You can buy full-time placement on quite a few sites, which is probably better for long-term effectiveness and brand awareness than per-click...I'm experimenting with that now. Sometimes it turns out really expensive though--I picked a few design-related sites, thinking web designers are also often webmasters, but so far, I've paid like $23 per click from one of them (from about 100k impressions)...I still have some time left on the ad, so it could drop a bit more as the ad has time to work, but I'm thinking I'll pick the best performers from the CPC ad list to buy full-time placement on in the future, rather than guessing about what fits.
TextLinkAds are too expensive and are kind of iffy on the "don't irritate your potential customers" scale, so I've signed up, but haven't bought any links yet.
Our best marketing tools are our various informational websites--we get 50% of our clicks from our Open Source project website, and another 10% from our documentation wiki (which contains our two published books on the topic of our Open Source project and gets quite a lot of traffic).
One interesting thing to note: Adwords clicks are stickier than any of the other types. Folks stick around for nearly 5 pages after finding us through Google Adwords, while Adbrite clicks stay an average of 2 pages (though some are better--very closely related pages tend to produce much better stickiness), and the other sources are somewhere in between. So, I suspect Adwords clicks are better qualified than those from the other sources, and thus worth more.
Of course, if you can't find keywords that you can competitively spend on, then you can't really make good use of Adwords. But, I'm surprised. I've used Adwords in two fields that were pretty competitive (in my previous business I was butting heads on one side with CDNs, and on the other with various types of server appliance vendors and proxy software vendors...while my current business sits along-side the highly competitive hosting industry, which has some of the highest per-click rates that I'm aware of), and never had trouble finding some less trodden territory to live in. Are you sure you're not going overly broad or trying to buy ads that would better serve your business partners or your customers? You obviously want to sit on the same spots as your competitors, if you can afford it, plus if you can come up with some alternatives (like for people who don't know what your product is normally called but know what they want to accomplish) that's a good way to capture customers that no one else has first access to.
So, it really depends on your industry, how wide a range of keywords would be useful to you, and whether you've got to fight with a dozen other companies or just one or two.
And, of course, Adwords is not the only kind of marketing that exists. It's just the easiest. You can advertise in all sorts of strange places--just figure out where your customers go, what they read, etc. and get your ads into those places via whatever means necessary.
BTW-Google's syndication network is a huge ripoff, in general. Do not let them run your ads on the whole network (it's enabled by default). It was eating our budget in a few hours each day for worthless clicks, and leaving no money for far higher quality clicks from the search engine results.