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Basically, you get to make an avatar for your console (like a Mii) and this avatar has a room. As you play games and accomplish certain tasks, you will receive items with which to adorn the room that are specific to the game (achievements). The kicker is that this is going to be a new requirement for every PS3 game...
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An inside source close to Sony made a post on the IGN boards a few weeks ago talking about a new feature that Sony would be implementing. At the moment the feature is dubbed "Home", and Sony has even secured a patent and logo for the name. The poster commented that this new Home feature would create a virtual home located in a virtual town, populated by the people on your buddy list. Your buddies can go inside your house when your PS3 is online, and you can go inside their house.
Your home will act as a storage of trophies, achievements, and other rewards that can be viewed by anyone on your buddy list. But, the most crucial aspect to the asset is that it'll let people listen to audio on your HDD and watch videos from your HDD (you make the audio/video public or private). You'll be able to play a host of mini-games like cards with your friends, and also have the virtual TV in your home display a video in your PS3. Lastly, the poster suggests that you can walk outside of your house and visit the Virtual Theater (you'll get movie clips/videos here) and visit the Virtual Arcade.
A NeoGAF forum member by the name of Gofreak discovered the logo, the patent, and a lengthy description that Sony filed for. At this moment, it's looking like "Home" is the real deal -- we just have to wait a few days until Sony gives us the full details on what sounds to be one amazing feature
