I checked one of my sites today and noticed that the adsense on that site were for that site's niche (keywords) as well as another niche I have (all meshed together). So for example on my sports website there was adsense for sports, as well as adsense for soap making (my other niche) all in the same adsense block. How is that possible???

Where you logged into your Google account? I'm not sure but I think it records websites you've visited and so may serve ads that are related to previous sites' content.

Cookies on your browser tell google where you have been and thus you get ads for things like.... HOSTING... LOL

Your users get the same experience, only for what they have browsed for. I searched for a software product recently and that damn thing keeps popping up in adsense ads everywhere, not just my sites.

That resolved it - I deleted all cookies, history etc and it worked.

You may want to turn this off as well "Do not show ads based on user interest categories." If you have not turned that off in your adsense panel already..