Whether or not it is 'too good' really depends upon how much you value the design of your site, as almost any adverts will always detract from your content and at the top end can really ruin a site. I personally don't see myself using ads on any major part of my site in the near future.
Anyway, Google adsense is indeed free and, depending upon how many you have on your page and the frequency of views and click-throughs, Google will pay you back. Note however that Google is very strict when it comes to compliance, so i you start clicking your own ads to try to increase your profit they will inevitably notice and withdraw all funds, which also leads onto my next point. Google also requires that you earn a certain amount before they will make a payout, if I remember correctly this is around $50, so if Google even thinks your utilising 'click fraud' then you may end up with nothing.