Was called software assurance under Borland. It gets you 3 (I think)
support incidents at no additional cost and entitles you to all new
versions of the product during the term of the contract (one year). If
you continue to renew the support contract you will continue to
receive all product upgrades at no additional cost.
Without the contract you will still be entitled to free patches, but
will have to pay for any new version upgrades. Note that the price you
quoted is for the Studio version and according to the new roadmap it
should entitle you the Highlander release later this year and could
even get you the Tiburon (Delphi) release scheduled for mid-2008.