I could almost break into song about this one. But musical cheesiness aside..
It's a sim, naturally. You begin life as a microbe, in a tiny.. 2-dimensional Pac-Manesque puddle. You eat the smaller algae stuff, avoid the bigger brown blobs. Eventually, as you eat enough, you get access to the editor, to mutate and change your little organism. Add flagella to move faster, a spike with which to defend yourself, or other things to grant other benefits. As you progress, the aquatic world in which you live zooms out, and eventually you evolve into multi-cellular life, in a 3-dimensional aquatic world. There are still things to eat, things trying to eat you, etc. When you have advanced enough, eating things and whatnot, and you find a mate, you can lay an egg, and get the more advanced editor. You're now manipulating things like the skeleton of the creature, adding things like flippers, mouth parts, etc..
From the ocean, you can eventually move on to land, in a fully adapted ecosystem. Per your own choosing, you can advance your creature's brain to the point where it becomes sentient, and there the game turns into Civs, kinda. You now have a hunter/gatherer tribe of your creature's specie, and you're competing with other tribes of your same specie. As you develop into villages, and cities, other cities will be raising up, too, with different culture. You can trade with them, establish diplomatic relations, or go in full on war with them. You could even convert them "culturally" (that's code for religiously). The creature editor is even adapted to let you edit and design their buildings, the items they use, the vehicles they drive/fly. (If you choose not to go on land, you can develop an undersea civilization).
There are no limits to the creatures you can create. The animations are all done procedurally, so depending on how you put the skeleton together, it may walk, fly, or swim differently. You can make a spider creature, you can make a dinosaur, you can make a 17-legged octopus with a dozen eyes and 5 bird beaks. Will Wright made a three-legged lizard thing with a hand on its tail, and made a carnivorous Carebear.
Eventually, you will dominate the planet, and can move on into outer space, visiting other planets in your solar system. You can use your UFO (which you get to design) to suck up lifeforms from a planet, and deposit it on a new planet. (Supposing the new planet as an atmosphere, the creatures won't explode). You can travel beyond your own solar system to the rest of the galaxy. You can travel outside of the galaxy, to other galaxies, and the rest of the universe at large.
The creature files are 1kb each, and because of this, the game will easily connect through the internet to pull creatures from a central network, where people's creatures are automatically uploaded. It will use these creatures to populate your world. If your ecosystem needs a flying carnivore, it'll find one that someone created. And if it can't find what it needs, or you don't have an internet connection, the game will come with hundreds of thousands of premade creatures. Because the files are so small, though, uploading and downloading is seamless. As you traverse the universe, you can even visit a planet someone else has created.
Now it's not really multiplayer. That planet is just a copy of someone else's. What this means to you is that if the sentient race on that planet doesn't exactly welcome you with open arms, feel free to decimate their entire world.
The game is the ultimate sandbox game. And you can find out so much more about it at http://spore.ea.com