Yeah, that's basically what it is, an awesome launcher that manages all of your mods in one place, and automatically updates any that are part of the official pack (you'd still have to update ones you manually add).
It started as an actual challenge map, Feed The Beast, wherein they had a bunch of chests that you had to put particular items into in order to complete challenges. Like, you might have to make a full gravity suit and put it in to complete one. And it should be noted that invariably they all started with you standing on one square in the middle of the sky (no land anywhere) with a lava source block and a water source block, and maybe a couple of other things. You had to make a cobble generator just to get materials to make somewhere to stand, etc. And there would be a single portal to the nether. They relied HEAVILY on Equivalent Exchange and things like killing pigmen until you got the random gold nuggets to drop, and when you got 9 of them you could form a gold ingot, and with EE you could then transform it into iron, put enough cobblestone into the transmuter and you could get more iron, etc. Now that EE is vastly different I'm not sure how they work, but it used to be all about getting as much raw material as you could to transform into other things (so mob spawners, for instance, were really useful). And the challenges were somewhat directional in that if you did one they might give you a piece of coal, which there was no way for you to get on your own, but now that you have it you can complete the next challenge, which might give you rubber, etc.
They are, pretty much, insanity mode difficulty challenges, but at least there is a point to them unlike vanilla minecraft. You can actually "win" an FTB map.
But since so many people wanted to play, and so many mods were involved in completing the challenges, and so many of the actual developers were all friends and playing/developing these challenges together, they decided to make a launcher that coordinates all those mods (50+ last I saw) into a working unit so that people like us aren't totally fucked trying to figure out how to get it all to work. If nothing else, the biggest bonus has been them all getting together and actually playing Minecraft on a server to test how all their individual mods interact with everyone else's mods, and thinking up improvements, etc. In my opinion the Forgecraft server (which is where the FTB people hang out pretty much) is the best thing to have happened to Minecraft since people first started modding it.