To increase website traffic there are two main categories
Paid methods. Will cost you some money
Free methods. My personal favorite. [Don't call me stingy

]
So first the paid methods
- Pay per click: The most popular PPC is Google adwords. You need to learn how to PPC before venturing into it. The way you format your ads and the keywords you chose could make you or break you
Paid advertisement in Ezines: There are some ezines ie on line newsletters that sell advertising space
Paid inclusion in search engine directories eg yahoo
Free methods
- Search engine optimization: Very important for long term traffic via the search engines. Remember on page SEO and generating backlinks
Blogs: You should create your own blog [free with blogger] and include links back to your site. Also you should add valuable comments in other peoples' blogs and add links to your site. Your comments MUST be valuable and add to the discussion
Article Marketing: Personally I like article marketing. I tend to submit a couple of high quality aticles to the article directories and include backlinks to my websites in the signature box. Make sure you apply some SEO to your articles. I suggest goarticles and ezinearticles for this
Social bookmarking sites. eg Digg, del.icio.us etc
Forum participation: Again you must ensure that your comments are very useful and add to the discussion. Find high traffic forums in your niche and share your experience there. Again include the link to your website in your signature
Build your opt in list: No getting around it, it is still true that the money is in the list
If you apply the above diligently, you will increase your website traffic in very little time
Of course what determines if your visitors will convert or quickly move on to another site is the quality of your content
Good luck