Basically it's an agreement to play Wow for the next year. If you agree and pay to play for a year any way you choose you get Diablo 3 for free.
12 * 14.99 = 179.88 (1-Month)
12 * 13.99 = 167.88 (3-Month)
12 * 12.99 = 155.88 (6-Month)
Not a huge deal but it's not bad either. If you play WoW.
In theory you could get it cheaper if you can find time cards cheaper.
EDIT: For those interested Diablo 3 is $59.99 at amazon. So a year of WoW for $95.89 or something like that.