It's called CryptoLocker and it's essentially a virus that gets on your PC and then demands money to remove it. There's a great article about it on Ars Technica that explains it in more detail and includes screenshots. It was also discussed on the this week's episode of TWiT (jump to about 30 minutes in to hear just that part).
For now, this only affects Windows. If you're using ChromeOS or a Mac, you're safe. If you're using your phone or tablet, you're safe. Any files you have saved to Google Drive, Dopbox, Gmail, etc. are safe.