For those of you that never had contact with a PTC site, here is a simplistic definition of this kind of website:
A PTC (Paid To Click) is a website that pays its member for the ads they click and view, on a daily basis.
In a detailed explanation, a PTC is the connection between advertisers and its potential clients (in this case the PTC's members). The advertiser pays a fee to the PTC and then the PTC shares a part of that fee with its members, with the only condition that the members click and view the ads.
I hope the next image will make you understand better how things work:

So, in order to earn money from a PTC site, you will have to click on a list of ads shown in your PTC member area, on a daily basis. Why on a daily basis?-because usually the PTC sites penalize the inactivity.
The number of ads in a list differs from one PTC to another, but there are no more than 15-20 ads in 24 hours.
Clicking the ads can bring you from $0.001/click to $0.01/click. I know that doesn't seem too much, but if you count the fact that you will click on more than 5 ads/PTC/day, and also you will be active in more than 5 PTC's, and you can earn also from every referral you bring to a PTC site well the amount earned increases considerably.
Every PTC has its own terms of service, rules and regulations, but also each one comes with a bunch of other offers for you like bonuses, contests, earn money from reading emails, earn money from signups. These particular things you will discover within every PTC member area.
One thing is also worth mentioning is that once you register to a PTC, your IP address is saved somewhere in their databases and you cannot hold 2 accounts to the same PTC, from the same computer (excepting the fact that no PTC allows its members to have more than 1 membership account).

A PTC referral is a person that joins a PTC site through your referral link or a person that opened an account at the PTC site and that is attributed to your account by the PTC administrator through the process of renting or buying.
There are 2 PTC referrals types of categories:
1. Depending on the way you get them:
a) direct referrals;
A direct PTC referral is the person that joins the PTC site through your referral link, from another website, blog, forum or wherever they found your link...
b) rented PTC referrals;
Most of the PTC sites are renting referrals for certain fees. This is possible because there are people that joined the PTC without being referred by other members.
c) bought PTC referrals;
Some of the paying PTC sites don't just rent referrals they also sell them.
2. Depending on the referrals activity within the PTC website:
a) active PTC referral:
An active PTC referral is a person that click on the ads available in the PTC account every day just like you.
For example: let's say you've referred a person to neobux (like here) and you both have 4 ads every day to click on then this person is an active PTC referrals if he clicks on the 4 ads day after day.
b) inactive PTC referral:
A PTC referral that is inactive is a person you from your downline that doesn't clik on the ads available in within the PTC website therefore it brings you no profit.
Inactive referrals can be recycled if they were rented and deleted if they were referred through your link or even if they were also rented.
There is really no point keeping the referrals if they are inactive - they represent people that probably forgot about that account.
As for the money you can make with a PTC site... your profit is directly proportional with the number of active referrals you have in your downline.

Usually every PTC site comes with a number of ads which you have to click on in order to earn the money.
Every ad presented in your members area can be clicked only once in 24h. After you've clicked on the ad you will have to wait a number of seconds in order to receive the credits. In the most common situations you will have to wait 30sec.
At the end of those 30sec, in the top left side of your browser window will appear a small icon which may vary from one PTC to another: a checkmark or a dollar sign... something like in the following picture:

When that kind of icon shows up it means you will receive your money, but there are cases when a red button/sign appears showing that somehow you missed the credit for that ad (this happens sometimes when you have more than one browser windows opened in the same time):

Anyway, to be sure that you will receive the credits for every ad you click, all you have to do is check carefully the TOS for each PTC site.
If you respect their rules you will most certainly receive your credits and also credits from your referrals work.

This was the question that came in my mind when I'd found the PTC sites for the first time. Now, the answer for this question is different from one PTC to another.
For example if you click on 6 ads/day each bringing you $0.01 and with $0.01 earned for every referral click, here's what you will have at the end of the day:
$0.06 for your clicks
and
$1.20 for your referrals clicks (let's say you have only 20 referrals)
Then, your daily earnings will become $1.26; your monthly earning will be $37.80; annual earning...well you got the point...
This example was for only 6 ads per day and only 20 referrals, but usually there is nothing stopping you from getting more and more people signup to these kind of websites, and also usually there are more than 6 ads per day on a free membership (a paid membership brings you either more ads per day either better paid ads).
Now you can say... "I don't know how to bring referrals" and still you would have no problem at all because you can buy referrals, or even rent them from your PTC site. There is still a downside to renting referrals, and that is - some of them will be inactive therefore will not help you too much, so you could start renting small packages of refs, see how they work and then pass on to a bigger package.
Most of all you shouldn't rush in buying refs if you do not trust the PTC 100%. First search for information about that PTC, then test it and only after you had no problems with it you can go further with buying/renting refs.

The referral link is the link through which you build your downline at a PTC sites or any kind of website that allows you to bring referrals and earn money on their activity.
The link can be in simple format just like you receive it from the PTC site. Here is an example of referral link:
http://www.neobux.com/?rh=your-ptc-username

It can be used as a text link like in the following example: