Disarm is a core warrior ability learned at level 28. It removes the target's weapons and shield for a short period of time. This has the effect of slightly lowering a mob's damage, but usually shows a greater effect against players.
Disarm is highly useful against mobs that wield weapons, which almost strictly means humanoids and demons. The damage reduction is marked, as much as 50-70%. For soloing, the cooldown is short enough that you can use it on each mob. For grouping, it can be used in tougher battles to nullify an attacker for eight seconds while concentrating on another.
Disarming a mob will earn you its undying hatred; it will generate a high amount of threat and is likely to stay on you for the duration of the fight (provided that nobody else does anything drastic to get its attention).
Using this against a Warrior or a Rogue will be very useful, since most of their abilities need a melee weapon, but against a caster it is waste of GCD.
Patch 3.1.0 (14-Apr-2009): This ability now disarms ranged weapons as well.