It occurs to me that I should show an example of a listing from The Writing World Defined--A to Z. Here it is:
Advance. Amount of money a publisher pays to an author up front, against future royalties. The advance must be earned back before you receive future royalty payments. The amount varies greatly from publisher to publisher (typically $1,000 to $10,000), and is often paid in two or three installments (on signing the contract, on delivery of the manuscript, and on publication of the book). Some smaller publishers do not pay an advance. The amount of the advance can be negotiated at the contract stage. Some writers choose not to take an advance so they don't have to worry about earning it back.
Payment of an advance represents a risk on the part of the publisher, because they can never be sure the author will earn back that advanced amount. If an author doesn't earn it back, they do not have to reimburse the publisher for the shortfall. About the only reason authors would have to pay back an advance is if they didn't submit an acceptable final draft of the book, or failed to live up to any other clause in the contract.
Originally, the purpose of an advance was to support the writer while he completed the manuscript, and if that is a need, it can still be based on that today. However, many writers feel like the amount of the advance is an indication of how well the publisher thinks the book will do in the marketplace, and how committed they are to promoting the book. For answers to the most common questions about advances and royalties, go to: http://writerunboxed.com/2011/11/28/11-frequently-asked-questions-about-book-royalties-advances-and-making-money.