Firstly, you can see Thesis in action. Go to http://diythemes.com/, then click the picture that says "Click here to see how you can design a Website with Thesis", and you'll get a video showing it in action. It basically adds a panel to your Wordpress Admin page that lets you control a lot of the design elements, namely number of columns, colors, fonts, etc.

Secondly, let me give the point of view of someone who uses Thesis.

I wanted to get my blog up and running. Obviously, I needed some kind of design, if even a basic one. I also wanted it to work as easily out-of-the-box as possible, since I wanted to concentrate on writing things and not mess around with learning Wordpress or Wordpress theme design (I have almost no experience there).

I saw (affiliate) links to Thesis on many sites that I admire, including descriptions of how good it is SEO-wise, and how much it's easy to use and customizable. For someone with no experience, it seemed like a good idea: I could install it, then use a nice web-based tool to customize the heck out of my design (which is what I did). If you watch the video, you can see that it lets you choose number of columns, size of columns, fonts, colors, and a lot more, all without going into any code. The few changes I did have to make in code were little snippets I found with very a simple Google Search, since Thesis is pretty popular.

If I have to get another Wordpress up, I'll definitely buy the package which gives you unlimited use of Thesis, since I already know it, and know that it will take me very little time to get a new blog working, and looking very nice with a very different design. All with likely an hour of work changing colors, fonts, etc. Obviously not a professional job, but definitely good enough to start with.

I'm very open to the possibility that Thesis doesn't help all that much. It's possible that with a few hours of work, I could learn enough about Wordpress and Wordpress theming to get to the same stage I'm at now with Thesis. But I don't know if that's true, and I don't know if I'll be missing important things (like SEO). So I was glad to pay to use Thesis (there's a lesson in what consumers are willing to pay for).

In any case, Thesis is a great case study in marketing!

It gives you an area in your admin panel where you can custom functions, change the colors, text settings and layout. It also gives you the ability to customize the css. You still need to hire a designer if you want to differentiate it from other people, unless you're happy with the default.

I believe it's considered a "theme framework" ... I think it adds panels/setting to the WP admin, allowing you to adjust column widths and other aspects of the blog.

so, its a theme plus a plugin?

does this instantly kill the entire premium theme/plugin market?

Not at all. The rest of the premium theme and plugin market already works under/with the GPL.

fair enough. thanks for the info.