Adsense advertisers (through Adwords) already compete against each other in the 'normal' auction process before each Ad is shown on your site.
What someone might be saying is that if you have your own adsense code and it is published as a separate 'creative', shown through your DFP 'Ad Unit' as a separate 'Line item' then any Ad Unit can also have another adsense block compete against it when you 'check' the box saying you want the Ad Unit to have adsense as a 'competing' network ... like doubling down in poker, or splitting a 'pair' in Black Jack ... would this increase revenue? I honestly don't know. Gut feeling? Maybe ... but probably not.
But would I still recommend using DFP, even with just Adsense? Yes. I don't want to say too much in an
open forum, but in essence, by taking the time to learn about DFP, it shows you are more 'serious' as a publisher and you are given much greater control by Google over your ability to show adsense through DFP, how it is shown, and to whom it is shown to etc.
A lot of small publishers complain that the 'Premium' publishers are given too much advantage in adsense compared to the small publisher, who have to copy and paste their code in directly from the adsense centre and then 'have done with it', having no real control over it. Some of this playing field can be levelled if you use DFP, and this is without breaking adsense TOS.
I would also suggest cultivating some Direct Advertisers, even just small businesses local to you, show their ad to just the one location (even down to just one state or city) and everyone else outside the target zone sees an adsense ad ... start small and grow this side of your publishing business.
I also know a lot of people say that 'adsense is the best and nothing comes close', but unless you use a third party ad server you can never really have a true A/B test of differing ad networks.
Try another ad network and actually compete it against adsense in a 'real' head to head - try different locations on your page, etc. you might be surprised that chikita might do better at different times of the day than adsense, in differing locations, for example.
If you have three adsense adverts on a page then perhaps the third adsense advert is the lowest bid in the auction, so it might be worth replacing just that one adsense advert with a chikita one (or a.n.other network) or rotate that adsense block with a chikita block to see how it truly competes in alternate servings over the same time frame.
[edited by: JoePublisher at 11:58 pm (utc) on May 28, 2011]