To be more exact, the phosphur is on the front glass, and (exactly like a flourescent tube) converts the ultraviolet light from the plasma burst into a pulse of visible coloured light (either red, green, or blue). Because this process is either ON or OFF, it has to be repeated very quickly, in order to vary the brightness - usually this is done 256 times, where 128 ON times would be half brightness for that sub-pixel.
The panel itself consist of two sheets of glass (of slightly different vertical size), with the air between them sucked out, and a trace amount of gas added (again just as a flourescent tube) in order for the sub-pixels to 'strike'.
What wears out on a Plasma panel (yet again, just like a flourescent tube) is the phosphur that does the conversion to visible light - and it's also this that causes screen burn - with sections of the phosphur wearing at differing rates.
So a Plasma panel 'wears out' by gradually losing it's brightness, with the most loss being in the first few months (again, like a flourescent tube), then gradually getting less over a number of years. I've seen a number of old Plasma sets - and while they may be less bright than new, are still perfectly acceptable.
Obviously the same 'wearing out' mechanism applies equally to the tubes in LCD panels as well.