Improved Disarm reduces the cooldown of the Disarm ability as well as increasing damage taken by the disarmed target.
Tips and Tactics
As stated above, you will typically see the greatest effect when used against melee 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 10 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).
Disarming hunters will make them unable use Wing Clip until they get their weapon back. However, being disarmed does not prevent them from using Scatter Shot or setting a trap, so it is better to use Hamstring on the initial Charge.
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 and rage. Since casters doesn't use their weapons nearly at all, that one Mortal Strike will be much more useful than Disarm.
Patch 3.1.0 (14-Apr-2009): This ability now disarms ranged weapons as well.