PlayStation Plus gives you an "enhanced" experience, on top of all the free stuff that regular PlayStation Network gives you. Early demos, beta invites, discounts on PSN stuff and patches. One year costs you $US50.
You also get some content that you own ONLY when you have a subscription, meaning it goes away when you cancel, locking you into the service forever.
Those who don't want to pay for a year, can get three months for $US17. But the free version still lets you play online (for the most part), until Sony starts changing things around. It sounds a lot like the Xbox Live Gold vs Silver distinction.