You earn 1 Reward Dollar for every $100* spent. Those dollars are transferred to a reward card (like a debit card) that can be used at WDW, DL, the Disney Store, etc. We used our reward card at food court at hotel and stores and restaurants in parks.
Since our last trip to WDW last November, DH and I have accumulated 198 reward dollars so far towards our November 2006 trip! (We would have more but we are using Citi Reward Card for gas, supermarket, and drug store purchases since it gives us 5% back on that, so we charge everything else we can on Disney Visa and pay everyone off at the end of each month. We have over $220 dollar so far from Citibank that that we are using for Disney too!!)
*There is rounding up done, but I am not sure exactly how it is done.