"The Cheapskate" is the person who cares more about the volume of traffic than the quality of that traffic. The Cheapskate (I'm there for some campaigns) never bids more than the minimum (usually $.05 but sometimes $.01).
When utilizing The Cheapskate form of bidding remember that AdWords also takes into account CTR when deciding which ad to show, and where to show them. If you have 1 ad about buying cars and you are advertising on searches about computers then your CTR is going to be less than 0.02%. AdWords will factor that in the minimum bid you must pay and also when and where your ad will be shown.
However, if you create one Ad Campaign and multiple Ad Groups then all you have to do is create multiple ads within each Ad Group. Make one ad about cars and put all of your automotive terms in that ad group. Make another about computers and put all of your computer related terms into that ad group. This way you are always showing terms related to the keyword which will help with CTR.
The Cheapskate will have to do a lot of work because his keywords will always be showing as "Inactive for Search". He will have to find more keywords or increase his spending since his CTR is low.
However, The Cheapskate gets a lot of cheap clicks, and that is the name of the game for The Cheapskate!
Is "Always #1" right for you? Possibly, but that is for you to decide!
If not, check out:
Steady Eddie
Vulture Bidding
The Cheapskate
Always #1
Quick Spender
