OK. Here is the link explaining how it works.
For it to work on ebay you have to have a paypal account and pay through paypal on a qualified Buy it Now item. You also need a Windows Live account which I think you get with a hotmail account.
You can do up to 12 transactions a year or up to a maximum of $2500.00. So don't waste it on low $$$ items.
Ebay has a 13% doscount. There are a lot of on line staores that accept it as well, but most only do up to 5%. At least for the tech stuff.