It is plastic. You buy it at the ticket booths between DCA and DL, and they give you a voucher so you can get into the parks. Then you take it to a processing center (either DCA or DL), and the take all your info and give you the pass... its the same plastic card as the others (actually, I think it might be a little thicker but that could just be me

), except its pretty sparkly gold and doesn't have your picture.
Oh, and the other poster was correct... if you've recently had a pass they can associate the old picture with it.
Anyway, I got mine at DCA, as did three other family members and two close friends. None of us have ever had any problems including entrance, fastpasses, and discounts (except once, a lady at the Hungry Bear Restaurant had trouble with a discount, so gave us the employee discount. Which turned out was a higher percentage

).
The main issue I have is that I can't get access to the WDW annual passholder website. This isn't a huge deal since I can check for discounts on here. I get into DL's fine so I think it might just be that I haven't used it at WDW yet.
Oh, and tomorrow will be my 7th trip to DL since upgrading, so definitely no problems