If you've got a 'non-smart' TV in your house, the Now TV Stick will turn it into a 'smart' one. i.e. you'll have access to catch-up services, such as BBC iPlayer and ITV Hub, as well as apps for things like viewing Youtube videos on your telly. There's no charge for such services.
You're also provided with the option to purchase one or more 'passes', which give you access to a range of Sky TV services. (Now TV is owned by Sky). Unlike using Sky directly though, there's no ongoing subscription; you can buy a pass for just one month if you want to. (You can even buy a Sports Pass for just one day if you want to, which could be handy if you just want to watch one major sporting event).
For example, I've got a Sky Entertainment Pass, which costs me £9.99 per month and gives me access to 9 Sky channels plus MTV, Comedy Central, Fox, Gold, SyFy, Discovery and National Geographic, as well as to loads of box sets.