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http://steamcommunity.com/tradingcards/faq
You need to join the Steam trading cards group. Once you're a member (automatically if you click join) you will receive an invite eventually. This can take a couple of days, though. Once you've accepted the invite you're good to go.
Once you're in the program you can get cards to drop from playing the games that are in the list (see link above). These games are: Don't Starve, Portal 2, Team Fortress 2, Half-Life 2, CS:GO, DOTA 2, and recently Borderlands 2 was added. They're looking to add more games to the list in the future.
You get cards simply by playing the game (time spent in-game). Every game has a set of cards - Half-Life 2 has 8 cards in a set, for example. You can only get half of these from playing the game (4), you need to trade for the other 4 to complete the set (friends, market).
Once you have a full set of cards, you can create a game bade which shows up on your profile and gives you xp towards your level. Creating a badge uses up the cards. You can then collect a new set of cards and create a level 2 badge. This badge goes all the way up to level 5.
It's not actually a "game" like Magic the Gathering, which shows up in your library and you can play. It's a "meta-game": it's a part of the new steam profile. You "collect" cards by playing certain games (spending time in-game) and by trading with others. By completing sets of cards you can then create badges which also increase your level.