As you defeat enemies they will drop yellow balls that will fill up the Drive Gauge. Once it reaches its maximum, Sora will go through a short transformation sequence which is in fact a sort of fusion, throughout the game Sora will gain the ability to fuse with various other party members.
However, this mode will only last for so long. After you merge, the drive gauge will become grey with a 5 next to it. The gauge will gradually decrease until reaching 0, upon which Sora will regain his classic appearance. But while in Drive mode, if you continue getting the yellow balls it will add to your decreasing drive bar.
The noticable changes in the Valor form are the change in uniform, from the traditional black outfit into a red costume. You can now wield two keyblades, your main one and one you specify in the items part of the menu (in the Valor weapon slot). The advantages are increased strength and speed, as well as more attacks per combo. You can also give damage to Goofy since the form causes you to merge with him. The disadvantages of the Valor form are that you cannot use magic, and Goofy will no longer be in your party for the duration of the drive.
For this form, your outfit will change into a blue costume, since you are now merging with Donald. Your Keyblade length increases, and you carry it behind you while walking. Instead of walking or running, Sora glides along the floor as if you were skating or hovering, and shoots white magic bullets out of the end of the keyblade instead of swinging it as a sword. The advantages are your magic increases, and different magic attacks can be combined to make bigger combos. Magic can also be used in much more rapid succession. The disadvantages are Donald is no longer in the party for the duration of the battle because of the merge, and the drive gauge runs out faster than normal.
The Master form transforms Sora into a yellow costume, and once again has him wielding two keyblades. Your strength and magic both increase, and one of the keyblades isn’t actually controlled by you (it is controlled with magic). The battle animation is modified, and has much more of a spin attack element to it. The speed of your attack is much faster, and after long combos you create large whirlwinds for large damage. Some disadvantages is that you are merged with Donald and Goofy, so neither is in your party for the duration of the drive. Also the drive gauge drains very fast.
Sora’s final form comes near the end of the game, and will transform him into a white / silver costume. The final form is the strongest form, but the hardest to obtain. You will once again be wielding two keyblades, but they will attack with a mind of their own. Both your strength and magic will greatly increase, and the attacks are the fastest possible. Also the attack graphics will have changed, and look much cooler. The disadvantages are that Donald and Goofy are both gone for the duration of the gauge, because Sora merges with them to gain their power. Also, the gauge drains extremely fast, giving very limited time to use this Drive form.
The Antiform is unique, because it is not selectable. It will occur at random when you use drive forms a lot. The form will turn you into a heartless like form but remain looking similar to Sora. You lose your Keyblades and you fight with claws just like a heartless would, which is much stronger and faster than keyblade attacks. Disadvantages are that Donald and Goofy are no longer in the party, and Attack is the only option on the command menu.