From Google themselves, your Quality Score is the key thing: The higher this score, the lower your CPC rate. Your score is affected by your CTR, analysis of search queries, ad text and keywords. Although the Quality Score is not shown, the best indicator is the Minimum Bid - the lower it is, the higher your score.
More details can be found at:
http://adwords.google.com/support/bi...er=21383&hl=en