The Annual Pass's benefits are pretty alluring -- you get the standard digital download edition of Diablo 3 for free, as well as the Tyrael's Charger mount for your WoW character. It's likely that other benefits will be added to the pass over time, too. All you have to do in return is agree to pay for a year of WoW. The "agreement" itself doesn't appear to be legally binding, in that you can still cancel your subscription, at which point Blizzard will remove the benefits you received, no harm done.
What makes the Annual Pass so interesting, though, is that it's actually a better deal for Blizzard than it is for the players. With the past few quarterly subscriber number drops interpreted as doom and gloom by outsiders, Blizzard needed a way to make sure that those numbers either increased or at least stopped slipping. With Diablo III and more Starcraft II on the horizon, not to mention other potential MMO threats, it was vital that Blizzard figure out a way to keep people paying even if they weren't playing. The Annual Pass, with its attachment of a "free" game, did the job perfectly. Blizzard gets to look good to its investors and umbrella company, and a million of you get a horse and a hack-and-slasher.