There are several digital distribution platforms on the web that offer games and software for retail price. Steam is one of them; and it is one of the best. Steam went online in September of 2003, and since then has built up a rather large catalog of over 1,000 games and over 25 million registered users. Steam has been a large success. Where else can you go online and purchase a game, download it, and install it (all of which Steam handles automagically).
What exactly is Steam? It was originally conceived as a way for Valve Software to digitally distribute their games (of which titles include Counter-Strike, Counter-Strike: Source, and all of the Half-Life games and expansions). When using http://store.steampowered.com/ you will no doubt be prompted to download their Steam Client if you decide to make a purchase through their site/service. This client program works similar in fashion as Itunes. The Steam Client app gives the user a central place to purchase, download, and install games. One thing to note is, if you purchase a game via the Steam Client you will not receive a box or any physical packing materials. Instead, that game title will be unlocked for to download at any time and play from there. On the other hand, if you purchase a box copy of say "Team Fortress 2" from a retailer such as Gamestop or Best Buy's store (physical brick and mortar store), you will need to download and install the Steam Client for authorization purposes (think: DRM). But with that being said, the form of DRM involved with playing Steam games is very non-intrusive and will rarely if ever give the user a problem (unlike most popular forms of 'DRM' or 'Digital Rights Management' used in games today). Steam is also used for patching your titles automatically. When they roll out the newest security patch or bug fix any titles that you have download (or added to Steam) your client will download and apply them right away (or whenever you login next). Another thing to note: you can also add non-Steam games to your games list to.
We've covered what Steam basically does, but there is so much more under the hood of their website/client; there is also a Community that is online and thriving within Steam of other players/gamers/fans. Steam has an integrated buddy list, group profiles/forums, group invites, group events, etc. It is easy to see that Valve has incorporated big plans into Steam and made it the central hub of everything you do with their service. Some people do not like this fact; however, the majority of their user's feel that their client/services are convenient and easy to use. As with any online retailer, you can take advantage of sales or discounts on popular titles. Steam is no different. They are constantly marking down games and running specials in which you can pick up great games at very good prices. The only real limits to their service is your download speed (once you purchase a game via Steam you have to download it) and the fact that when the good games go on sale, I'm usually broke. And think of it this way, shopping with any digital distribution site (Steam, Direct2Drive, etc.) is definitely greener that driving to the store, purchasing a box copy of a game, driving home and installing it.
With all of the above being said, Steam is a great deal and offers the convenience, the money saving deals, and the "greener" shopping experience than other alternatives.