The term "graduate school" usually refers to a PhD progam that allows students to pursue research on a particular topic. Programs that prepare people for specific careers, such as the MLS program that Segnbora-t mentions, are often called "professional schools" instead.

Most professional programs ultimately return students to the real world, so they don't usually produce the effects that the other writeups have described. Graduate school, on the other hand, can be a hellish, soul-crushing, mind-numbing experience that squeezes the last few drops of creativity and free thought out of a formerly vibrant soul. I've seen it happen to people...but it does not have to be that way. I'm currently in a PhD program in neuroscience, and I enjoy it immensely--sure, it's occasionally hell, but so is almost any job. I've learned some lessons along the way that have helped me keep my sanity:

Before you even think about applying, make sure that graduate school is really for you.

You've gotta love what you're doing. You can't just kinda like poetry or sociology or physics; you've gotta love it. Grad school requires intense, long-term, near-monomaniacal concentration on a particular topic, and if you don't love it, you'll get tired of it well before you're done. People who thought their undergraduate biology classes were pretty interesting, and who want to take more of them, are probably better off taking classes as a visiting student somewhere while pursuing another career. There's nothing wrong with that; you'll be happier--and probably more productive to boot.

On the other hand, if you've found a single topic that captivates you beyond your wildest imaginings, if you find it endlessly fascinating, if you want to learn more and more about it and come up with new ideas and discover previously unknown truths, then grad school is for you. Go for it, and have fun.

Don't lie to yourself about this. You will regret it.

Choose advisors carefully.

You're going to be working with this person for the next five years or so; you'd better know if you can't stand him. Some advisors will use you as a slave; others will treat you as colleagues and collaborators. Some will attempt to crush your ego and break your spirit; others will challenge you and make you smarter. My own advisor falls into the latter categories. I pay a price for working with him, because he's not as prominent as other people with whom I could have worked; it'll probably be a little harder for me to get a job at the end of it all. Nonetheless, he's a far nicer person and a far better teacher, and I don't think I would make it through with the other people I considered.

Ask the students in the department about your prospective advisor's style. It's not a rude question (unless you ask "So, is Professor X an asshole?"); it's vital.

Choose programs carefully, too.

Talk to the other students in the program. Ask them if they have time to pursue other interests outside of graduate school. Students at my program will happily tell you that they do--one person volunteers at a nursing home, another coaches a basketball team, another codes for a MUD. On the other hand, if the students look disdainfully at you, implying that you're unsuitable for the program if you actually have an outside interest...then they're right. They're probably lost souls, but they're right. Choose a different program...or you'll end up like them.

Pursue other interests.

Wait--didn't I say earlier that grad school requires monomania? No--I said it requires near-monomania, and I said that for a reason. In grad school, you'll be tempted (sometimes pushed) to focus on your topic to the exclusion of absolutely everything else (including eating and sleeping). Some people even feel guilty when they leave for a meal or take a nap, and they shudder at the idea of actually going on vacation for a while.

It doesn't matter. You need to take a break. The papers will wait. The books will still be there in two hours. The experiment will work the same way tomorrow. No, really--they will be. Trust me.

Take a break. Do something different for a while. Force yourself to do it. At first, you might feel a little guilty about it, and your thoughts will continually return to your work. Soon enough, though, you'll find yourself relaxing and having fun, and when you do return to your grad work, you'll return refreshed. Pursue some other academic interests. Last semester I was on an American Government kick and read The Federalist Papers and On Liberty; now I'm on a religion/mythology tear and am slogging through From Ritual to Romance and The Golden Bough. Both these pursuits taught me more about the world around me--and, even though you wouldn't expect it, they've helped me think more clearly about my own field. Pursue some nonacademic interests. Take martial arts. Learn to cook. Swim. Take up racquetball. Give your mind a rest for a while.

Find a way to keep one foot in reality.

Delusion is pandemic in academia. Professors have the habit of forgetting that there's a real world out there, and that it's far more complicated than they usually imagine. Don't let this happen to you; find a way to stay anchored. Talk to people who don't know anything about your topic. Teach at a gifted-and-talented summer camp; students there tend to ask lots of naive yet insightful questions. Node what you know and write about your research on Everything.

Books alone don't do it. Get out into the world and see how your topic fits in. A botanist friend goes on nature walks to remind herself of the beauty of nature and the complex ecosystems of the real world. A family friend is a professor of law, and he insists on maintaining a part-time private practice. I study memory and amnesia, so I spend some time working with Alzheimer's patients. I can't speak for other fields, but I know that psychologists who don't work with patients tend to conduct research and make recommendations that seem mind-bogglingly asinine to anyone who's spent more than three minutes with an Alzheimer's victim and her family.

Remember reality. Find a way to touch base with it every now and then.

Good luck.