We study the deposition and the very first steps of nucleation and growth of Ag on Pd(100) with thermal energy atom scattering. This technique is a very sensitive and nonperturbing probe to surface point defects, which permits an in situ and in-time monitoring of the deposition. The intention of this paper is to give a detailed description of the approach used in our work. The form of the specularly reflected helium signal as a function of coverage and surface temperature is compared to a theoretical curve, which is computed by solving a system of rate equations that describe the formation and destruction of clusters during the deposition process. The analysis of the experimental data gives two main results. The diffusion parameters (activation barrier E/sub d/=0.37+or-0.03 eV and preexponential factor nu /sub 0/=8*10/sup 9/ s/sup -1/) have been extracted for the system Ag on Pd(100). We find furthermore that all silver atoms impinging on a zone of 6.1 AA around an adatom on the surface are captured by it at surface temperatures well below the onset of thermally activated mobility. The origin of this phenomenon is discussed and tentatively assigned to a combined effect of transient and neighbor driven mobility.