What's with adsense anyway?

I have been blogging for some months now, and everyone knows that you can make money using Google Adsense. But how do you get your blog approved by Adsense?
I have tried for my other two blogs which are about 3 months old and have over 40 posts, but by Adsense directions your blog must have a top level domain www.example.com in order to be accepted.Now if that was entirely true then no blogspot blog would ever earn anything, right?

But I know many blogspot blogs who have been accepted by adsense.

So what's the real deal ? How can a blog get accepted by adsense? Does the traffic,pageviews also matter?
I f you own a blogspot blog acceted by adsense , plz leave a piece of your mind.!