What happens when someone steals your content and generates even more views than you do and had been earning ad revenue for a while? Besides reporting them etc.. what actually happens to the money?
What do you mean what happens to the money? A channel posts a video, they monetize it, Google pays them. It doesn't matter if the content is stolen or original. Unless it's reported, they get paid.
I read somewhere it use to go to the original owner/creator but this may have changed recently. Does anyone know? I have done a forum search and didn't find any new info. TIA
YouTube has announced (and, as Shane recently stated, it should go into effect in June) that, once a video is claimed, any future earnings will go into an escrow account to be paid to the proper person after it's settled... but that is only for earnings made after the report.
As for any money earned before you reported them, they've already received it, likely spent it, and YouTube has no reason or obligation to repay you for it. To them, they've already paid out what was owed from the ads and, if the channel didn't have the rights to post the video, you should have reported it earlier.
As has already been mentioned, if you want to recover any lost earnings it would be up to you to take the thief to court and attempt to sue them for it... which would likely cost you far more than you could ever recover.