According to Kotaku, the course creator "lets you build a custom racetrack based on a set of parameters. Players can select a theme, choose the number of sections and course type (one way or loop), weather, time of day and length."
Kart racing is exactly that: go-kart racing. Some video from the Gamescom 2010 show floor has emerged, showing off the new mode in Gran Turismo 5. Thankfully, there don't appear to be any power-ups.
Luckily, Sony has actually convinced him to stop adding things and actually release the game in November. We think.