You are buying runes with the same 'currency' you buy champions and this is IP, you gain IP from every game you play. Runes are put in a rune book, and before every game start you can chose one of your rune books.
Ability power is like spell damage. It will boosts the damage of most of the champions spells by certain ratio. All spells have different ability power ratio. That means if you have 100 ability power from items and you got a spell with 0.4 ability ratio for example, this spell will be increased by 40 damage.