Extra Magic Hours (EMH) are free and are only available to guests staying at WDW resorts.
The morning EMH means that particular park opens to WDW resort guests one hour earlier than for the general public, and they check out whether or not you're a WDW resort guest at the front turnstiles.
The evening EMH last for 3 hours after the usual closing time of that particular park. This is accomplished through the use of wristbands (the same kind that hospitals use, that can't be removed unless you break them). Starting about 2 hours prior to the park's normal closing time, CMs appear at various spots within the park to hand out the wristbands (usually not at the same spots in the same park each time there's EMH). They actually put the wristband on each person, but only after each person shows their WDW room key (each guest has a room key/park ticket, except kids under 3, and they don't need a wristband anyway). After the park's normal closing time, guests without a wristband will not be allowed on any rides or attractions. IN ADDITION, at least by rule, guests without wristbands are not permitted to make purchases in shops or restaurants, although I'm not sure how strictly this is enforced (twice on the same night in MK last month, CMs told me I couldn't make the purchases I was attempting, until each noticed my wristband and then they happily completed the transaction).
-- Eric