"Plastic crack", in geek parlance. Or a fairly nifty strategy game. It all depends on how you play it (and perhaps your budgetary willpower).
Knowledge: History
Dungeons & Dragons is the venerable granddad of all RPGs, and after 30 years it's still the most widely-played game in the genre. Over that time, the game has largely gone full-circle.
In the late 70s, D&D began as a tabletop strategy game played with armies of miniature orcs and elves instead of miniature Frenchmen and Prussians. In the 80s, D&D became an iconic "dungeon crawl" game where players drew maps and rolled dice to battle imaginary monsters in trap-filled tombs. In the 90s, D&D branched out in more directions (from the high fantasy Forgotten Realms to the sci-fi tinged weirdness of Planescape and Spelljammer) and the game became more about telling a good story— with monsters and traps thrown in, of course. In 2000, the 3rd Edition of D&D brought the game "back to the dungeon"— and, not coincidentally, back to miniatures.
Attack of opportunity
In previous editions of D&D, miniatures were optional. Many players, myself included, play the game simply by describing where they are in relation to the other characters. If exact distances become important, a quick map can be drawn on a piece of scrap paper. This is fun; it's fast, it's challenging, it's infinitely portable... it is not, however, very profitable. You can't sell scratch paper.
It's also a niche product, since it only appeals to certain kinds of people (the kinds of people who never stopped "using their imagination" basically), while a game where you move around tangible pieces on a board is an easier concept for the mainstream market to grasp. To that end, D&D 3rd Edition introduced new rules that made the game much more miniature-oriented. The updated v3.5 Player's Handbook even lists "miniatures to represent each character" under the heading "What You Need to Play", right alongside pencils, paper & dice.
In 2003, to the surprise of no one, Wizards of the Coast (the publisher of D&D) launched a "Dungeons & Dragons Miniatures" game to fill that burning need. Ka-ching!
Synergy bonus
So, in crass business terms, WotC created their own market and then exploited it. Despite that unflattering backstory though, I should say that DDM itself is a fairly nifty & well-balanced little strategy game.
The game is actually a potent fusion of 3 major sub-genres: It has a distribution system of "starter sets" and "booster packs" borrowed straight from CCGs (cf Magic: The Gathering), the slow detail-intensive strategy of a wargame (cf Warhammer 40K), and the familiar rules and setting of an RPG (cf Dungeons and Dragons, obviously).
Each player controls a "warband" of 8 fantasy creatures— goblins, unicorns, giants, demons, you name it— with each creature represented by its own unique figurine. For game balance, each figure has a specific "point cost" and each warband must weigh-in below a certain point limit (200pts, typically). Every figure comes with a card describing its various attack options and abilities. The players take turns moving their pieces around a 2-dimensional grid (called a "terrain") and making attacks against the enemy. Attacks are resolved with the roll of a twenty-sided die.
The rules themselves are a slimmed-down version of 3.5 D&D, with only a few major changes: damage is predictable instead of random, pieces attack in "activation phases" (I move two, you move two) instead of initiative order, and most units must make a "morale save" roll when they drop to half their starting hit points (if they fail the die roll, the unit becomes "routed" and is effectively useless).
What I like most about the game, though, is its open-endedness. When I was a kid I was constantly mixing pieces from different board games and making up new rules. ("Hey, what if we used the little Game of Life cars in Monopoly? Better yet, what about the cannons from Risk? Mwahaha..."). DDM isn't so much a game as an ever-expanding set of game pieces. Do with 'em what you want.
Appraise check
The huge downside, of course, is price. Full disclosure: I purchased exactly one DDM starter set and two booster packs in the entire time my friends and I played the game (on and off for about a year). Total cost = about $45. This is the absolute limit I'm willing to spend on a game, any game.
Like passport says in the w/u above, buying D&D minis just for RPG usage is insane. Gamers, please stop and consider what you and your friend could have bought with that combined $90. Dozens upon dozens of pewter minis on Ebay? A small stack of sourcebooks? 3 or 4 complete board games? Or— dare I say it— a memorable weekend of food, drink & adventure, outside, in the real world?
For pre-painted plastic figures, though, they certainly are pretty-lookin'. The figures in the first few sets were a bit funky, with cartoonish features and a limited color scheme. But as time rolls on, the level of detail has increased remarkably, to the point that even lowly "commons" are often vibrant and richly-detailed. They've also gotten bigger: beginning with the 4th set, "Giants of Legend", each set of 60 figures has included a few battlefield-dwarfing figures of the "Large" or "Huge" size category, standing 6+ inches tall. Some of these make for respectable paperweights and geek chic office decor between sessions.
Random encounter table
To date, there have been 14 sets of minis (and always another on the way), each with a different general theme:
- Harbinger (Sept 2003): iconic characters & monsters
- Dragoneye (Dec 2003): dragons & dragonslayers
- Archfiends (Mar 2004): paragons of good & evil
- Giants of Legend (Jun 2004) : giants & giant-killers
- Aberrations (Oct 2004): weird horrors & dungeon-crawlers
- Deathknell (Mar 2005): deadly creatures & dark heroes
- Angelfire (Jun 2005): angels & demons
- Underdark (Oct 2005): drow
- War Drums (Mar 2006): goblins
- War of the Dragon Queen (Jul 2006): Tiamat & her spawn
- Blood War (Nov 2006): outsiders & planewalkers
- Unhallowed (Mar 2007): the undead
- Night Below (Jul 2007): classic dungeon-delvers & dungeon-dwellers
- Desert of Desolation (Nov 2007): exotic adventurers
When one set goes into production, the previous set is retired, creating an element of forced scarcity that fuels the "collectible" aspect of the game. However, WotC designed the game so that each set is backwards compatible: that is, you can combine pieces from any set when creating a warband.
Individual pieces can be procured pretty easily (and inexpensively) on Ebay or at your friendly local game shop. It's also a pretty easy way to develop a crippling addiction to tiny plastic figurines, so beware and for gods' sakes try to roll high on your morale save.