The demographic bidding is available for both keyword- and
placement-targeted campaigns, as some publishers within the Google network know demographic details about their site visitors. You can bid on a CPC or CPM basis, and you can also bid higher on
specific demos to ensure that your ads get prominence with your desired target.
Amber provides a detailed explanation of how to set up a demographically targeted AdWords campaign, as well as direct links to Google and MSN's FAQs--as Live Search has offered the feature since June of 2007.