My mum and I visited a traditional Hammam when in Tunisia last June so I give you my personal experience.

It's basically a public bath-house (men on a morning, ladies on an afternoon) so I hope you aren't shy as there will be some locals in there. Don't go in expecting a spa as it's very basic.
You go in and are given a wash cloth and a small bowl. You strip to your panties (or whatever you feel comfortable in) and have a sit in a sauna type room for a while.
You'll get called in and be exfoilated and washed on a warm stone slab.
You are then free to rinse yourself off further and wash your hair under a showerhead or in cubicles with a sink - that's where the bowl comes in. This is the bit where all the locals where when we went.
Afterwards, you get dried off and have a rest while they serve you a drink.
We found the experience very relaxing and my skin felt so soft for the days afterwards. In that respect I'd recommend you have it done in the first few days of your holiday as it'll help you tan better.
We got to keep the wash mitt, which is the best I've ever had and I still use to exfoilate on a weekly basis.
Unfortunately I can't tell you the price as we got it complimentary but I would suspect that it's really only the drink you pay for.

Thanks puddleduck2 for sharing your experience. Would love to hear anyone else's. Especially anyone whose's tried thalassotherapy. I have heard tell of seaweed wraps which I like the sound of. The hammam sounds a bit scary!

Hammam simply means bath; Hammamet - the place of the baths.
Most of the hotels will have their own steamroom or Hammam with various other treatments available. The more stars, the more you get. Massage is widely available in hotels about 20TD or so per go with deals for longer courses.
Thallassotherapy when I did it consisted of getting hot in the steam room, being painted head to foot with algae, back in the steam room, hose down, scrape down, shower. I topped it off with a massage. It leaves your skin wonderfully soft.
Anyone going to the Melia Mouradi at Yasmine Hammamet - I strongly recommend the head and scalp massage offered by the hairdressers there.