I'm sure not all cast member entrance works the same, but I can tell you how it has worked for us when cast member friends (performers in a show, if that matters) have gotten us into the park, most recently in September 2011.
You go with them through the cast member entrance (I'm talking about the cast member-marked entrance at the regular front gate turnstiles, not backstage; there are usually only one or two of these open per park), their cast member ID/entitlement card (not sure what it's called by Disney) is scanned and you get an actual hard ticket which is activated for that day only. That is a park hopper ticket and, from there, you can go to whatever park you want, with the same entry/reentry and FastPass privileges of any other purchased ticket.
Each cast member has a hard number amount, total, for the year (divided into, I believe, quarters),(My daughter has worked at Disney over four years now and I am not aware of any division of the perk into quarters. I know she used 8 this summer and then another 6 before the end of the year) and they don't accumulate (it's use 'em or lose 'em), but it does take a while after employment begins for those to kick in. [I](Her admission perk even as a CP started as soon as she got her maingate which was just a few weeks after starting)[/I] It is not until after, I believe, 15 years of employment (relatively rare at Disney) that cast members receive a hard number of daily guest entry passes. Depending on length and place of employment, cast members may have guest entrance privileges only at the park they are assigned to, or only one or two of the theme parks. [I](I have never heard of this. My daughter was able to get people in all four parks immediately and this has continued during her part time and now full time employment)[/I]For instance, we've met our cast member friends at Animal Kingdom in the morning to get admission, and then gone immediately to Magic Kingdom with that ticket without issue. But that same cast member couldn't meet us at Magic Kingdom for direct admission there. (But they could at Hollywood Studios.) I believe these are privileges tied to seniority, because we've had longer-staffed cast members tell us they can meet and get us in at any park. [I](Again, I have not found this to be the case with the CMs I know; mostly parks, resorts, and reservations CMs)[/I]
Cast members can also do dining and room reservations at a discount, but must do so personally via a special phone line and (I think) be present on the room or dining reservation to get the discount. Cast members, after a short probation period has passed, can themselves get into any park as regular guests as often as they desire. (CMs can get into any park as soon as they have their ID) It's also possible, depending on where your cousin works (a show performer, for example) that they have access to special seating areas or meet and greets with characters, etc. We've been lucky enough to experience both multiple times and it's pretty cool.(I agree this is cool - we have had special seatings at a few shows due to performers we know and it is cool) They can not, under penalty of termination I believe, take you anywhere that qualifies as "backstage." (And, we'd never ask them to, but noting that, just in case ...)
I'm sure someone will correct me if any of the above is inaccurate, but to the best of my knowledge that's how it works ... Or at least how it has worked for us.
We know a couple dozen Disney employees, past and present, quite well and various friends have been kind enough to get us entrance to the parks in '96, '98, '10 and '11. (Seeing them was always a big part of our going to Disney World.) Because I know their guest entrance supply is limited we've never asked them to do that for us for more than a day or two, or for more than two people (so, never for our whole family or whole trip) ... Just because I didn't want them to feel obligated and use up their allotment on us. Now, the last time we were there, we talked to at least two long-time (10-year-plus) cast members who told us they couldn't possibly use up all the passes they receive so, from now on, we might look more closely into taking them up on that on future visits.
EDITED TO ADD: Cast members can NOT get into hard-ticket events without buying tickets (which they can do at a discount). We wanted to meet our friends at the Christmas Party last year and, even though they are both Disney employees, said they could come to any park, at any time, EXCEPT during the party events, unless they were working the party. (Apparently, this used to be a benefit, but was cut at some point.) They also, of course, can't get guests into hard ticket events with their free pass privileges.