It's just been announced today, so no one has heard it yet, but the website shows that the Echo combines a set of speakers with microphones, wifi, Bluetooth, and a computer to drive it all, and then packs it into a cylinder 3 inches wide and 9 inches tall:
There is also a remote, and Amazon is launching companion apps for Android and iOS.
All in all this is Amazon's most novel product yet. The Verge would call it the most ambitious, but given what Amazon has launched over the past year I would see this as more of a logical next step.
Amazon already did streaming audio with the Fire tablets, voice recognition with the Fire TV and Amazon Dash, and TTS in the Kindles. In short Amazon took all of their previous work and then added the ability for the Echo to talk back to you.
I don't mean to criticize Amazon, just to point out that much of what the Echo can do is established tech wrapped up in a cool new package. That is actually a good thing, because it means there are fewer bugs to be worked out by the early adopters.
The Echo is available today, but by invitation only. It costs $200 ($100 for Prime members). For those of us who aren't chosen, here is the promo video Amazon posted: