A lethal gas is released into the air, and once people start inhaling it they come down with zombie disease. Some people band together and fight the zombies.
There's not a lot to Planet Terror, but what is there is pretty entertaining. Unlike the other Grindhouse movie, Death Proof, Planet Terror moves at a breakneck pace and the only dialog you will encounter will either explain the plot to you (a couple lines) or tell you jokes (the rest). So it's definitely a more enjoyable movie. It is also definitely a much better exploitation/gore film, with the wettest zombie deaths ever filmed and constant gore effects once the movie gets going.
But it's almost too good. While it works as a great modern zombie flick, it fails as an emulation of "grindhouse" movies. The effects are unbelievable, with explosions all over the place and even a rocket launching peg leg. You simply didn't have this stuff back then, so the aging effect applied to the film to make it look like you are watching the movie in some hole in a wall theater ends up being confusing rather than clever... especially when you watch the movie at home. I don't think anyone who enjoys horror exploitation movies actually likes the poor quality we often had to put up with either on film or on VHS, so this whole thing really makes no sense to me. It would be like taking Silence of the Lambs, aging the film, and going, "See? Just like back in the 70s!" Movies have changed since then and adding some crummy film effects and even the immediately stupid "missing reel" nonsense isn't going to bring them back.
However, regardless of how this movie was unfortunately marketed, I am not going to review it as a "grindhouse" movie and instead will compare it to its peers. It's hilarious with a clever script and likable characters, and wickedly gory without being sadistic. If only horror movies had gone in this direction rather than in the direction of endless remakes, PG-13 ghost flicks, and mean-spirited but dumb Saw movies we'd be doing pretty well I think.