From the U.S. Department of State
"A passport valid for at least six months and an onward/return ticket are required. As of February 1, 2004 all American visitors to Indonesia will need to obtain a visa. Travelers may apply for a visa at the Indonesian Embassy in Washington, D.C. or at the airport upon arrival. Visitors may be granted a 3-day visa for a fee of $3 or a 30-day visa for a fee of $25. Both visas are non-extendable, and travelers must exit the country for at least two weeks before they can return. A visitor's visa for business purposes and social/cultural stays of longer duration require a letter of intent/sponsorship from the employer and/or sponsor..."
Other countries who can obtain visas upon arrival include Australia, Argentina, Brazil, U.K., Canada, Denmark, Finland, France, Germany, Hungary, Italy, Japan, New Zealand, Norway, Poland, South Africa, South Korea, Switzerland, Taiwan, and U.A.E. (info from Cybergoldfish)
Practically, the only real effects that will result from this change are that you will have to pay for a visa when you arrive. Tony Matheis tells us that in addition to the 30 days a visa grants you, you can extend your stay by up to 14 more days without leaving the country.