Much like the Prince Valiant comic strip, the game ostensibly takes place in 5th and 6th century Britain, but borrows heavily from the high middle ages by transplanting technology, customs, and social norms, essentially enabling the stories and tales of the great Arthurian epics to occur in that earlier time with the later trappings. Some of the unique bits to the game include a heavy emphasis on social traits (personality traits, virtues, and passions) and an epic sweep where years roll by quickly, allowing players to build families and lineages of heroic knights.
I'm in no rush to play, since my current D&D campaign is rolling quite well, but I adore the setting and could see myself using it almost whole cloth when my younger kids are ready to play. They love knights and faeries and wizards, and the default Arthurian setting described in Pendragon is brilliant. "Dungeons" aren't part of it, but there's an event called 'The Enchantment of Britain' which heralds a return of magic to the realm during Arthur's reign; it provides a handy excuse for old fey passages and forgotten holes in the ground to reopen, allowing the goblins and bugbears and other night creatures to return to plague the forests of the countryside by night. My younger ones would enjoy such a setting quite a bit; my oldest just got finished reading The Once and Future King, and I'm sure he'd enjoy such a game as well.
Anyway - thanks for the inspiration, readers, but I have a further question - what are your favorite Pendragon supplements? It seems like The Great Pendragon campaign is a must-have; I've seen it described on forums and whatnot as one of the greatest RPG supplements or adventures. Are there any other must-have Pendragon supplements for elaborating the setting?