That's bad, It's sabotage... It's pretty scary to know that webmasters with high traffic websites (using adsense) can be affected easily by these kinds of actions.

What actually is Google's definition of a false click? And how does it currently differentiate between normal and false clicks?

i hear stories of some sites trying to take advantage of Google's AdSense program. This is probably why Google has to be very strict when it comes to these kinds of issues.