Yes, it takes place between the second and third games. Samus has tracked a space pirate ship following her escape from planet Zebes. You actually start the game with the power-ups you would have finished the first game with, which I thought was a nice touch...of course you lose them pretty quickly. You start by raiding the pirate's station and then track a beastie down from orbit where you begin to explore the planet.
After 4 hours I've just moved on from the first area, the Chozo ruins, and into the magma caverns below after picking up the Varia suit.
The Chozo ruins were awesome. You can scan virutally anything and most of it reveals some backstory.
Don't be turned off because its first person. It really doesn't play like a shooter since most of the time you're exploring. Sure, there are enemies, but they don't come in droves (usually) and most creatures require some strategy to put down, not just firepower. You can't pass this up if you're a fan of the series.
I would say this is the best game I've played for GC yet, and one of the best games I've played all year. True, I'm still under the WOW! factor since its new...but I can already feel it sucking my life away which is always the mark of a good game.
I have to commend Retro for also putting the original Metroid on the disk as well. Unfortunately, you have to have a Game Boy Advance and to have beaten Metroid: Fusion to unlock it (Stupid Marketing Ploys!). Hopefully in the future they're release a way to unlock it w/o the GBA.