I saw it recently demonstrated at a gaming Expo here in Aus - It's not going to be released until December 2011 - February 2012 (depending where you are in the world)
As for what it's like... do a quick Google search, there are some great Youtube links showing the features etc.
Some of the "augmented reality" (AR) stuff looks very cool (imagine taking a photo of, say, the table in a cafe and then having virtual characters running/fighting/etc around the objects on that table during gameplay)
Physically, the unit is like a PSP with thumbsticks, plus it has a touch-screen and a touch BACK.
One of the demos of this they had was Little Big Planet - the player touched the front screen to push a block out of Sackboy's way (ie, "into" the background) and then touched the back of the unit to push another block out of the background into the foreground for Sackboy to jump up onto.