Yeah, PS+ is PlayStation's version of XBLive. With PS3 you could online game for free but this time round on PS4 they wanted a slice of the pie so you have to pay. There's more to it than just online play though. The "Instant Game Collection" is actually pretty inspired. Certain games are free each month and while it's never the latest games, I've been a member for 2 months now and have snagged enough to keep me going for far longer than I actually have!
The downside is that when your subscription lapses, so do your free games. I don't know if they stay on your system and re-activate if you resubscribe but from what I've seen so far, I doubt it. We downloaded a PS Vita game for Shaz but forgot to copy it from PS3 to PS Vita. By the time we remembered to copy it to the Vita it was no longer on the free offer and therefore wouldn't let us install it. So that kinda shows they're being pretty on the ball and unforgiving with it.
Worth it though IMO, especially if you have PS Vita as well...