Type 4 is a casual format with two fundamental rules:
* Players may play spells for free (i.e., players have infinite mana)
* Each player may play only one spell per round(this serves as a limitation to balance the first rule)
Due to these two rules, the format is also known as "Limited Infinity". Some players use additional rules, such as 'only rares and uncommons are allowed'.
Since the mana cost of spells is irrelevant, players can more freely use powerful rare cards in ways that would be impossible in "normal" Magic. This makes the gameplay very dynamic and exciting. Also it means that players can use cards that are normally "unplayable" due to prohibitively high mana costs, allowing players to utilise cards which are in low commercial demand. This makes the format quite cheap to get into; along with the "high thrill" gameplay, this has made the format quite popular.
Due to the nature of the format, many cards are banned - for example, a Fireball would instantly win the game, due to the players having infinite mana to pump into it. Also, there are many cards that are extremely weak in constructed Magic but extremely powerful in Type 4 - such as Vedalken Orrery, which allows the controller to play threats during other players' turns.
To prevent the format from becoming excessively overpowered, players' decks are usually drafted, rather than constructed. Often one player would construct a stack of approximately 200 cards, which is then distributed amongst the players using one of several drafting methods - eg Booster Draft, Rochester Draft, or Winston Draft.
We played it slightly different in our games. Only one of us has any of the really old stuff so he brings his pile of 300+ cards and we all just draw off the top of the same library.
The format is really fun and allows players to play with some really strange and huge cards.
[EDIT ABRA - Renamed - trying to find some convention here]