I don't quite understand the strategy of "Hedging".

In general, I understand what "hedge" means. A reduction or elimination of risks. I understand if I have a house, or a car, I should buy insurance in the event of theft and fire, it will protect me from a total loss. So longing a stock and buying call options to cover the entire holding, so that if the market goes down I can limit my risk by paying a little premium.

I can understand hedging as a protection. What I don't understand is how you can use hedging to make money. In another thread, we talked about hedging the automotive stocks: long GM and short F or vice versa.

If I have a perfect hedge, shouldn't I be at a neutral bouyance? e.g. I long SPY and short DIA with a equal ratio spread. So no matter whichever way the market moves, I will be okay. But the big question is: Why do you do it? How can you make money when you are perfectly hedged?

So my question is: How do you make money by hedging?