It can be very effective. But unless you are pointing it directly to a sales page it will be tough to directly analyze sales via the advertising you do. Unless you have it working well it can be very expensive, you should put a cap on the amount you spend each day along with doing intense keyword research.
There is a lot of content out there on AdWords and how you can use it effectively. Many rely solely on AdWords for their business which makes it relatively easy to read up and find the pros's and con's. I highly recommend you get straight on with optimizing your AdWords experience so that you don't go blowing a fortune on advertising it to the wrong market. Keywords and choosing the right ones are key!
More to come.. but that's a starting point for you Mark.
Before you even start with adwords, get yourself a tracking script so you can tell what keywords your visitors are coming from and quickly dump the ones which aren't paying for themselves. £5 isn't a lot to spend on adwords, google sometimes offer a free voucher for new adwords acconts so try and google for one.
Google Adwords
Linear Mode
December 2008
