Well, since I don't use it, I may be wrong in saying it's the equivalent of Big Fish for other-than-casual games. You have to download the Steam Client to use Steam though you can play games, they say, off-line once they've been downloaded and installed.
Here's a fairly decent (I think) article on Steam
from last year by a guy who likes Steam if you want to do some reading. I always hit the comments, too, for reactions.
Edit: In my cranky view, what it all means is that it's your game as long as Steam says it is. They claim that if they ever go bottoms up, they'll release some kind of code that frees you of having to use their client. I am not trusting. And I don't like clients.