What has me so enthralled with this game is the physics engine. Game developer Squad has incorporated very good physics, and this game is a good first-order approximation of orbital mechanics - first-order because it doesn't solve the n-body problem. The game is still in Alpha, and version 0.13.3 is available for free download. There is also an option to pay $15 for the game, in which case you get the most recent version (0.15) and all subsequent updates for free. Each time they update the price goes up, though version 0.13.3 will always be free.
There's more to the game than just building a rocket and getting to orbit. In the free version, it is possible to land on the moon of Kerbin (Mun) and return your kerbonauts home. The paid version features a second moon and spacecraft persistence, allowing multiple objects to be sent into space, forming a moon base and so forth. There are also extensive mods available, some as part of the newer versions and some as part of player-made extensions to the game. Version 0.15 also includes spaceplane parts, for exploring suborbital space.