Ahh, Garry's Mod. One of my all-time favorites, and the reason I'm even here in the first place.
Gmod is a simple game. You are given the Source engine, a bunch of tools, some props, and cut loose to do, and I kid you not, whatever the eff you want to do. Want to pose alyx and kliener in naughy positions? Want to build a working hovercraft? Want to blow -beep- up? HAVE FUN!
It's a great buy for 10 bucks. Literally the only limitations as to what you can do in Gmod are A: Your imagination and B: What the game engine can do. Maybe you can also count "If you don't have x prop you can't build Y contraption", but I'm not sure about that.
To run it, you require:
Windows
A computer that can run any Source engine game
A Source engine game, as Garry's Mod is a mod and does not ship with the engine itself
Steam
I recommend buying the CSS + Gmod pack if you don't already own CSS. Most maps and mods for Gmod use CSS resources. I also suggest buying the Orange Box. Not only do you get a ton of badass games for pennies, but you also get props and models from them for use in Gmod. Gmod will mount any Source game released by Valve except Left 4 Dead 1 and 2. The community, however, has provided L4D 1/2 model packs should you want to use models from those games.