It's obviously a mod for Source games, like Half-life 2.
What you can do in it, is spawn all the props and characters from the source games you have.
Like Counter Strike Source, Day of Defeat Source, Half-Life 2, Half Life Episode 1 and 2, Portal, Team Fortress 2, etc.
You can only really spawn characters with AI, if they're from HL2. The other characters are rag dolls you can throw around, change facial expressions, fingers, and pose them.
You have a number of tools, in which you can place balloons, change a physical property, weld 2 objects together, rop objects together, thrusters you control by the keypad, change an objects color, texture, or the trail they leave behind, make cameras, hover balls, turrets, ignite things, nail things, place wheels, and it goes on and on.
You can also download mods for Gmod that allow you to have more tools, or props. Maybe even more NPCs, or vehicles. You can even change your player's model to a variety of HL2 characters, and CS:S characters.
But yes, Gmod is definitely worth the money.