AP's are Annual Passes. They are your ticket for unlimited admissions to the four major parks for 365 days from the date of first use. If you are interested in the water parks, etc. you can purchase a Premium Annual Pass which gives you entry into all of the major parks plus the water parks.
Annual Pass holders also (sometimes) get better rates on their rooms and some meals than with other discounts.
It all depends on how much time you are going to spend at the parks whether it's worth it to you or not. If you're going for 5 days this year and then not again for 2 or 3 years, AP's are not worth it. If, however, you plan on spending more than 8 days a year at WDW, they are well worth the price you pay.
Hope this helps!