With the 3-day or 4-day wine package, you get your choice of 3 or 4 bottles of wine from a list provided at the time you purchase the package. There is a "classic" package and a "premium" package. The 3-day price is $69 (+15% gratuity) for the classic and $109 (+15%) for the premium. I estimate you save about 25% compared to purchasing the same 3 bottles. Prices for the 4-day are proportionally higher.
You can use your wine package at Palo. Just tell your server that you have purchased the wine package. We used our third bottle on our last night of a 3-night cruise last month. If you prefer to purchase something fancier at Palo, by all means do the 3-bottle package on your 4-night cruise, but you are not obligated to do so.
We were quite happy with the wines available on the standard package. In fact, I had done the wine tasting (hosted in Palo) earlier during our cruise and 3 of the 6 wines we tasted came from the classic wine selections and the other 3 were on the premium list.
Ralph