My kids like it and I think it's pretty cute. Yes, you do have to pay, it's like $5.95 a month you can pay by CC or just buy the prepaid cards at the grocery store or Walmart. My 5 year old asked Santa for a membership for X-mas this year. They buy houses and clothes and different colored penguins, they have to remember to feed their penguin and there are cute lil' games on there like making pizzas...they show you a pizza and a conveyer belt comes up and you have to hurry and make the pizzas exactly how they are...or there is another one involving lobbing snowballs at targets.
IMO, it is safe and small child appropriate.