There's a comprehensive thread here with almost everything you need to know:
About UCLA's College Honors Program:
But the recognition is minimal for graduate school, etc., so the real benefit of Honors is the priority registration for classes. It's not really competitive, and you don't have to do it.
Also, there's requirements for getting in... for incoming freshmen, it's 2080+ SAT and a 4.1 UC GPA, or top 3% ranked in your school. You can also apply after the first quarter, though, but the GPA requirement doesn't come to mind at the moment. It'll be in the link above though. :]