Unity is a desktop shell for GNOME. This is not the same as a totally new desktop environment. A desktop shell is the interface that you use. Unity will still use the same GNOME apps and libraries that the current desktop does. GNOME shell is an example of another shell for GNOME.
Unity is developed by Canonical for Ubuntu. It is dual licensed under the GPL and LGPL (version 3). It was originally developed for the netbook edition but is going to be modified to be suitable for the desktop.
Currently, it is not suitable for desktops.
It consists of a top bar, similar to the normal gnome-panel but not the same. Instead of the Applications/Places/System menus is an Ubuntu icon that opens up an overlay called the dash which allows launching of files, folders and applications. It also has a global menu, that embeds the File, Edit etc. menubar from applications into the panel. It shows the menu of the currently focussed window. When windows are maximised, their controls (close, minimise, restore) are embedded into the panel as well. These are space saving features. The desktop edition is planned to not have the global menu because on a large screen it would move the menu far away from the windows being used and so the user would have to move their mouse all the way to the top to get to the menus.
There is a launcher and dock on the left hand side of the screen. This can't be moved. It is planned that for the desktop edition it will be detachable and be able to go on any side of the screen. It is also likely to have an autohide feature.
The expose style feature is like the scale plugin for compiz. It gives you an overview of your windows and allows you to switch between them.
Unity for the netbook edition currently used the mutter window manager. This has had some performance problems so it is being replaced with compiz for better performance. It is planned that it should gracefully degrade if 3D accelerated hardware is not available.
Unity netbook interface:
![alt text](https://i.stack.imgur.com/BRzW6.jpg)
The interface for the desktop is currently being discussed:
Launchpad Blueprint
Best Answer
Until now Unity has used the Mutter window manager, which is the next generation of GNOME's Metacity and incorporates Clutter. However this has shown itself to have mixed hardware support - while it works fine on some machines, it is (almost) unusable on others.
However Canonical has already ported Unity to Compiz, which has been the default window manager in Ubuntu for the last three years. This should lead to far better performance and hardware support - if you current machine can run Visual Effects (enabled in System->Preferences->Appearance->Visual Effects) then the new version of Unity should run fine.