The $299 Stand is basically a sturdy plastic frame that holds an iPad in front of a sales person in a similar way to more traditional touchscreen cash registers, combined with a very slender card-reading slot. The device offers Square's friendly card-processing terms and analytics, and can connect to other hardware, like receipt printers and cash drawers. Other vendors, such as Revel, have tried to combine iPads with point of sale hardware like this before.
The slot in the Stand, it must be pointed out, reads the magnetic strip on cards--much like the initial Square iPhone dongle itself. The magnetic strip/user signature combination is proven to be a very weak card security device, and Europe and many other nations have moved beyond it to chip-and-PIN solutions and even NFC.