Ceiling medallions are generally used around a light fixture to enhance and decorate the area where it hangs. It makes the room appear more elegant and suitable for formal occasions.
Plaster: the Original
Ceiling medallions come in two varieties, plastic and poured plaster. The first ceiling medallions were hand crafted by pouring plaster into a mold. They were expensive and very fragile.
Plastic: the Improvement
Plastic ceiling medallions are mass produced and therefore much cheaper than their plaster predecessors. They are also lighter, which means not only are they easier to install, they are less likely to break if dropped in the process.
Image by Kelly. It has been edited for size.