That's the marketing guff:
http://uk.playstation.com/playstationplus/
Basically it's £40 a year like Xbox Live, and every month Sony give their Playstation Plus subscribers free games, avatars, themes and a few other things. It also adds an option where you set a time and your PS3 will search for all your game updates and also download demos and other stuff it thinks you might be interested in. Mine is set for 4-6 am so while I'm asleep it'll switch on, check for updates for my games, check for firmware updates, check for any demos it thinks I might want to try, download them and then turn it's self off. When you turn the system back on it will let you know what it's downloaded for you.
There's also rumours of Party Chat being added a little later on with Playstation Plus subscribers having access to it, although we don't know much really as it's just rumours. In a nut shell it's £40 a year for a bunch of free content and discounts that change on a monthly basis. It's a total lottery as Sony won't be announcing what is free each month but either way you look at it it's still good value for money as I've almost gathered most of my money back purely from Destruction Derby, Little Big Planet and Wipeout HD which was given away to me in the first month.