Ragefire Chasm is a dungeon instance located directly beneath the Horde capital city of Orgrimmar. The series of caverns that wind their way through some volcanic territory are the hideout of a cult called the Searing Blade, who are suspected of plotting to take down the Horde from the inside. They are underlings for the demons of the Burning Legion, who we'll see more in-depth in the Burning Crusade expansion.
The portal into Ragefire Chasm being where it is; the center of the Horde's busiest city, meant that prior to the Random Dungeon Finder, the Alliance had a hard road to travel to get inside. They had to either ride through and hope that they weren't cut off of their mount, or die inside the city gates and walk their ghost to the instance portal.
The instance is very short, and is another introductory one, for all intents and purposes. There are 3-4 bosses, the main one being the orc warlock Jergosh the Invoker.