Playstation Home is a virtual world a bit like Second Life. You make an avatar for yourself and then interact with other avatars in various themed areas, its basically a chat roon with an interactive virtual interface. Lots of game developers make areas based on their games so you can meet up in a Killzone themed space or a Electronic Arts space, often there are mini-games or ways to interact with the different spaces.
To be honest its kinda shite but its free so you cant really complain. Most likely is that this content would be limited to the Japanese version of Home so you would need a Japanese PSN account in order to access it.