How Does It Work?
Instead of inching your way through a huge line, you simply insert your Park ticket into the designated machine in front of the desired attraction. It spits out a printed receipt, which gives an hour long window of time for you to return, usually an hour or so later. (For example, you put your ticket in the machine at 1:00, and it gives you a stub which tells you to return between 2:00 and 3:00.) Just come back anytime during the designated time window, jump in the line marked "Fastpass Return", and your actual time in line is cut down to 15 minutes or less. You can still wait through the normal line if you really want to. The normal lines are now marked "Standby", which gives them a little bit of a psychological disadvantage to encourage the use of the fastpass. Both lines are merged close to the loading area, 10-20 guests are let by from each line alternatingly by a Cast Member.

Any Added Bonuses?
Yes. If you are willing to wait through the normal line, you can ride once before your time window is used up, making for two rides in a row! Also, if there are small children or non-thrill seekers in your group, you can use their tickets to gain extra fastpasses.

What's the Catch?
You knew there would be one, but it's not as bad as you might think. Disney says you can only have one fastpass per ticket at any given time. It is printed in the park maps that your current fastpass must be used in order to obtain one for another attraction. Say you have your 2:00 - 3:00 Fastpass again. You cannot get a pass for another attraction until your time window starts, which would be at 2:00. It is said the system is linked throughout the parks, so you cannot hold passes for rides even in other parks at the same time. There is another downside; If you don't get a fastpass for an extremely popular ride before too late in the afternoon, you might not get one at all. This is because all the time slots have been "booked up" by previous guests.

Is It Worth It?
Definitely! Combined with a little planning ahead, it can significantly increase the number of rides you can do in a day. Besides the few minor catches listed above (and the occasional moody receipt machine), the system is running very smoothly and hopefully will make waiting in line a thing of the past.(Thanks to TB for the help!)