Do affiliate programs really work?

I keep asking this question. As some of you may know, I have been dabbling in affiliate programs lately. It started with a program from work (Digital River) that gave me the chance to make this: www.safelykept.com. So far I haven't sold much here and have spent more on advertising. A few people in the program have become profitable and are selling $1000s per week in software. I don't know how profitable. This opportunity though has really gotten me to learn a ton more about marketing and affiliate programs in general.

My favorite find is some stuff at this site www.dangrossman.info. This guy is 20 years old and still in school at Drexel U. He puts a lot of good, helpful, honest stuff in his blog and his forum communications. From what it looks like, this guy is having a lot of success as his profit from this year has paid his last 2 years of school tuition and living expenses. Is that like 50Gs!? For a 20 year old kid doing this part time while in school! Ok, now that has to be motivation.

He has a lot of advice on his site, but the one thing that is standing out the most to me, is that he has had much more success selling other people's services than products. So the reselling of hosting, advertising, etc. does much better than his attempt to sell cooking supplies from Amazon. With that in mind, I think I am going to venture further down this road of affiliate marketing of services.