Here's how Kickstarter works:
1. You put up your pitch for an idea on the website, listing how much money you think you need and what people get for contributing. If you're making a game, most tiers include getting the game upon release, as well as beta access or some such.
2. People may or may not contribute, depending on how much they like your idea.
3. If and only if the amount contributed reaches or exceeds the amount you were asking for, you get the money and can now develop your product, provide the rewards, etc.
Basically, it's an amazing alternative to the current publishing system. It can and will go wrong, though - the phenomenon (in gaming at least) is less than a year old, and I'm sure we'll see plenty more failed products and scams. Not sure what their policy is if the project is funded but fails to provide what it promised.