No you don't pay for it up front, you just do an online agreement that you are going to stay subbed for a year. WoW's sub works the exact same way as SW:TOR's, with the same increment options and I even think the exact same prices. I am currently on a month-to-month billing plan for both of them because I can't affiord the expense of $72 at once for the 6 month plan. You did get free stuff for siging up for the annual pass, though. you got a free mount for all characters on your account, a free digital copy of DIII, and an automatic invite to the MoP beta.
I haven't used the MoP beta invite and I would actually prefer a hard copy of DIII, especially if it doesn't require a huge install on my hard drive. My OS/WoW/SW:TOR drive on my new PC is a 120 gb SSD and I only have about 33 gigs left after Windows 7, S:TOR, and WoW. I am planning on uninstalling WoW which should give me close to 30 gb back, but I'd prefer to keep 30-40 gb open on that drive in case something else comes along that grabs my attention. If I just replace WoW with Rift and then have to do a massive hard drive install of DIII, I end up with 15-20 gb left on the SSD and would have to start installing programs on the 2 TB 5900 RPM HDD I installed to use mainly for storing pics, movies, and the like.