Whether you are a general devotee to Arthurian litterature or "just" a Pendragon player, this is one book you cannot do without. Apart from giving a deep game background, it also is an overwiew of nearly all medival Arthurian stories, fitted together in an unified historical timeline. The 4th edition version even completes the games list of horses!.
This book is an example of pure role-playing craftmanship, right from its beginning (where creating a campaign is compared to weaving a medival tapestry) to its end (one of the most elegant treatments of Arthurian chronology i have ever seen). People who want a slightly more "standard fantasy" (or as they would call it, "dark") version of Pendragon should find the earlyer chapters most intresting, while more serious players will find them usefull as a contrast to the more chivaleric periods. My personal favourite sections are the ones describing the late, decadent period of King Arthurs reign- very appropriate for making comments on "modern" England.
I could go on. The roman campaign! the Camelot random encounter table (with elements taken from disney rather than gary gygax)! The nun and the hare!
The best part of this book is that in spite of its rich, detailed material, much is left mysterious: it is both strange and vivid.
Or to put this slightly differently: this is the Pendragon dungeon masters guide. I find it difficult to imagine playing the game without it.