Platypus basically hit the nail on the head.
If you try to make a Blood Elf for example, it will tell you that you don't have the Burning Crusade, if you try to go to an area that you don't have access to (for example try to step through the Dark Portal from Blasted Lands to go to Hellfire) then it will basically tell you:
"you must meet the level requirements and have The Burning Crusade installed".
You pay for each expansion, and install it, but the recurring monthly fees are the same each month.
If you know someone with WOW though, and you are just setting up your account, beg them to do recruit a friend. You level almost 3 times quicker, and can grant them levels too. I haven't used it, but those that have said it is better than sliced bread.