This article says it better than I can.
There are three types of brake pads, asbestos free organic, semi-metallic, and ceramic They are a mixture of chemicals that is dense, but softer than the rotor. This is to help lengthen the life of the rotor so the pad is worn away and not the steel wheel rotor.
From what I know, Ceramic pads are supposed to last longer and make less of a grinding noise. They are a little more expensive and you usually see them installed on luxury vehicles.
Another reason for ceramic over traditional is that they are supposed to wear more evenly and not cause as much damage to the wheel rotor.
If you have the extra money, ceramic is the way to go. You get what you pay for there man. To play it safe, stick to the type specified by the manufacturer of your car, take the old pads in with you when buying the new ones to make sure they are the same!