Google LSI? SEO or AdSense?

[nicola]

Google LSI is or Google Latent Semantic Indexing has been touted as the biggest thing in the SEO industry. The whole concept according to half a dozen result pages on Google is that LSI is actually a technology that helps Google identify blackhat SEO and mis-categorized links and then helps Google blacklist sites adopting wrong SEO practices.

On the other hand, many result pages also say that Google LSI comes from their acquisition of Applied Semantics and that acquisition was for the existing Google AdSense, because Google wanted to use semantics with AdSense to deliver highly relevant and targeted advertisements.

What of all this is true and what not? What is LSI actually? Can anyone explain?? I will be really waiting for the positive responses here.