Hi Sterling,
PhotoPass is a fun idea. There are photographers located throughout the parks in Walt Disney World who will take your picture. Simply walk up to one of them an ask for a photo. They'll ask if you have a PhotoPass card. If you do, give them your card; if you don't, they'll give you a card. The service, itself, is absolutely FREE. When you get home, you'll be able to view your photos and purchase the ones that you want.
You can also purchase a Photo CD that includes all of the photos taken. It's rather expensive (currently $169.95).
If you pre-purchase the CD before your vacation, you'll save $50.
There is also the PhotoPass+ option that allows you print packages at some of the dining locations and digital photos from attractions where photos of guests on rides are sold. The pre-purchase price for this is currently $169.95. If you buy it on vacation, you'll spend nearly $200.
Hope this helps. Have a magical vacation!