The PSN is thought of by many PS3 owners as simply the service that lets them play their games online. While this is true, the Network has much more to offer, such as the Playstation Store, Playstation Home, Playstation Plus and many other features to enhance your online gaming experience.
Playstation Network is, at its heart, Sony's answer to Microsoft's Live service. At the PS3's launch, Playstation Network was a limited service that essentially managed a user's distinct online identity and multiplayer gameplay. The earliest functions of the Playstation store were downloads of game add-ons and trailers.
The service has expanded vastly over the last four years. It now includes community functions such as expanded user profiles, Playstation Home and massive expansions to the store including full retail games and a catalog of video content.
One of the root concepts of the Playstation Network has been free multiplayer and chat. The recent release of Playstation Plus service offers additional functions for a subscription fee but the core Playstation Network experience remains free and will continue to be.