They legitimately give out the money you see in the ads - someone does win the million every week - but the odds of winning are up there with the lottery. The payout scales down pretty hard too. 83,000 of the 400751 slots pay out something, but only the top 4000 get $100 or more, and 33,000 of them just get their entry fee plus $10 - $30. Where they screw you is in the "matching your deposit" - you would have to play $1000 worth of tournaments or something along those lines to get a $40 deposit matched...
The "known" gurus mostly play solo, but they play huge numbers of lineups, so that part is right (and I'm sure people pool as well). The big boys play 50+ lineups in the big tournaments, sometimes 200+. It wasn't unusual over the summer to see the same guy win six or more of the top ten payout positions in a tournament and take home $200,000+. They also recently approved the use of scripts to make lineups (which the big guys were already doing - they just amended the TOS to openly allow them in order to keep their business), so you have people entering hundreds of lineups with very slight differences in the roster all at once, and able to make tweaks in seconds if injury reports come out, etc.
One of the bigger fish (maybe the biggest) - Maxdalury - plays hundreds of lineups in all the tournaments and makes a pretty solid living at it. In this last Millionaire Maker, just glancing at the final standings, he came in at 184, 189, 204, 249, 264, 351, and 399th places (that's all I looked at - I'm sure he had dozens more) for a win total of $7500 on $140 worth of entries.
There are plenty of tales about his exploits out there - this one was the most recent:
http://espn.go.com/fantasy/baseball...are-computer-scripts-bad-daily-fantasy-sports
