An annotated bibliography is a works cited list, but each citation for your sources is followed by a paragraph of explanation and justification: why is this source one of your sources? What does it bring to your research?
You will summarize the relevant information you're getting from that source (but remember, this isn't your paper -- you are summarizing, not presenting all the information itself) as well as how this well help you in your research (by providing background information, by exploring a certain angle, by presenting a contrary idea...).
Creating an annotated bibliography is not simply an academic exercise. An annotated bibliography is a tool to help you summarize your source content and evaluate its place within your research. If a source satisfies your "usefulness" criteria, that source belongs on your annotated bibliography. This process begins the transition from reading sources to incorporating content (ideas, quotes, paraphrasing) into your work. It is time to "make sense" of the knowledge you have gained from your research. This knowledge is the foundation on which to build your own voice, explain your methodology, discuss your conclusions, make and report on your new knowledge.
Of course, evaluation of sources goes beyond "usefulness" to the other elements of authority, credibility, currency, and purpose.