Here is the link for more information on Banff National Park.
http://www.pc.gc.ca/pn-np/ab/banff/index_e.asp
There are no special discounts, just the regular youth, adult, senior, family, group. The pass is for anyone that enters the park no matter what the reason, ie. camping is on top of the park fee. The fee is charged to help with maintaining the park, etc. As mentioned, there are gates at the entrance where you have to stop when entering. There are also places within the townsite where you can purchase a pass, I would assume one place would be at the bus depot. It is somewhat on a trust basis as well, but as mentioned they do patrol the parking lots and streets on a regular basis to ensure that everyone has a pass.
Have fun on your holiday - you will absolutely love the Banff area, it is amazing to see, especially if you are not from the mountains. Ensure that you go to cave and basin and swim at the Hot Springs, there are also some great native museums to see, Johnston's Canyon is a great short hike, there is just so much to do! Have fun! Also, you may wish to have a vehicle when you are there, depending on where you are staying and what you want to do, there can be a fair distance between things.