A postal money order is a lot like a bank money order, or bank draft, except it can be cashed through both a bank and any postal outlet/office.

Be careful of the exchange rates that Canada Post offers you if you're buying in a foreign currency. Unfortunately, they no longer accept US$ Cash when purchasing a US$ Money Order. 

Canada Post Postal Money Orders cost:

$5.50 for CAD$ Money orders and US$ International Money orders (for cashing in the USA only)

$6.00 for some others.

For the most part, these money order prices are terrible. They used to be $3.50 or so, and even that was a lot.

If you're sending funds to someone in Canada, it probably makes more sense to send a regular money order. It will have to be cashed at a bank, but this shouldn't be a problem for most people. However, if the receiver will have to take the postal money order to a cheque cashing establishment which will probably charge 1% of the face value, it may be cheaper to send a postal money order, which is cashed at no charge through a post office. 

"Regular" Money orders aren't available just through banks, but sometimes convenience stores too. I recall the lottery booth in a local mall selling them for $2.xx recently. 

If you are sending funds to the USA, "regular" money orders can be problematic for the receiver to cash, since American banks treat anything from Canada as foreign, and it will take forever to clear, and even may incur substantial fees to process. Postal money orders may be the way to go in these situations. If this needs to be done frequently, consider getting a US Bank account as a Canadian so that you may write true US cheques.