Add-on domains are a 1 time fee of $15.
As for what an addon domain is... It puts another stand alone domain onto your hosting account, but without another cPanel. It points to a directory in your public_html folder, but the outside public never knows that.
http://www.addondomain.tdl it actually located in
http://www.maindomain.tdl/addondomain but always appears as just
http://www.addondomain.tdl.
Does that help? I hope that helps.
It's essentially if you want to run two completely seperate websites without buying another hosting plan.