If I bid .10 on some hypothetical traffic source and some other person bids .20 does that mean I get nothing at all, or does it mean because they bid higher their ads will run first and then eventually mine will run ?
Depends a lot on the traffic source. Each has it's own algorithm.
Generally on banners you get latter impressions.
In pops most of the time your gets nothing at all or a very small %.
Yep depends on the traffic source and a number of factors.
What kind of auction system to they use? VCG? This will fundamentally change how impressions get distributed and how a bid corresponds to a paid CPC.
What are the competitor budgets? Are there multiple competitors? How much volume is available? If there are 30 competitors bidding higher than you, but their budgets sum to only 75% of the volume per day, then you will get traffic.
If the top 5 out of 50 competitors have budgets to take all the volume, they may just do that - depending on the bidding algorithms and auction systems.