The trail is gravel, mostly hard packed, well kept, but I haven't been on much of it yet. I have a hybrid with a 32 mm street tire. I have been told that my tire is wide enough but I should get a more agressive tread to avoid punctures.
The trail goes from tip to tip (280 km), with side trails into Charlottetown, and other coastal areas. Lots of web sites, check this one out:
http://www.islandtrails.ca/confed.htm
You can bike the trail as part of a tour (4 to 6 days), or do it yourself. There was a tip to tip race a few years ago, it was three days.