It's in the same category (habit formation) as Daisy and Streaks but with a somewhat power-usery focus. You commit to any number of quantifiable goals (e.g. "work out three times a week for the next 6 months"), it reminds you to stay on track, and if you fall behind, actually charges you money. The idea is to tie your long-term goal ("work out regularly") to your short-term sense of immediate priority ("work out today or it'll cost ya").
One of the reasons it works for me is that it fits with a flexible schedule. I don't have to work out at 8am every Monday; I just have to work out sometime early in the week. I can build up a "backlog" and "spend" it later. Conversely if I have a crappy week and let habits slide, it reminds me to make up for it the following week.
The Beeminder team also blogs regularly on the subject of habit formation and self-control - e.g. http://blog.beeminder.com/flexbind/ which goes into more detail on why they've designed the system the way they have.