To get the most out of it you need Freeview but the on demand services are brought to you through the phone line.
More here
http://www.productsandservices.bt.com/consumer Products/displayTopic.do?topicId=25362
If I can't get Freeview is it worth getting BT Vision?
If you have BT Total Broadband, you can still watch BT Vision's on-demand films, programmes and music, while getting terrestrial channels (BBC One, BBC Two, ITV, Channel 4, Five) through your existing TV aerial. However, you won't be able to use some of BT Vision's features, like pausing, rewinding and recording live TV.