It has only one known weave, and when evoked, summons a blindingly bright beam of "liquid light" that is capable of destroying nearly every known substance. The real danger of balefire, however, is that it can undo (or erase) the past actions of anyone it hits: for instance, Rahvin, a Forsaken, killed several characters but was later balefired by Rand al'Thor. "After", the slain characters' deaths were undone and they were later found alive, with only vague memories of their deaths.
Balefire dates back in its use to the War of Power, when it was used to destroy entire cities. It is implied that the channelers of the age did not entirely understand what they had discovered, but that when they realized they were unraveling entire swathes and days of the Pattern, and in doing so threatening the very fabric of Creation itself, both sides mutually abandoned its use. In the era of the novels, only the Forsaken (survivors of the War of Power), Rand al'Thor, and a few of their associates have access to balefire without the assistance of a ter'angreal.
Cuendillar is the only known material to resist balefire. Rand al'Thor did once part a stream of balefire with (or through) the sa'angreal Callandor in the Stone of Tear, but whether or not this is an integral quality of Callandor (or, for that matter, what The Sword That Is Not A Sword is made of) has yet to be addressed.
It is possible that the intersection of two beams of balefire can cause adverse effects in the channellers. When Rand and an unknown male channeller (who was almost certainly Moridin) used balefire at the same time and the beams crossed, both were nearly knocked unconscious by the backlash. Some regulars in Wheel of Time newsgroups consider this to have cause in temporal paradox: both men were still channelling exceptionally powerful weaves that they had never actually cast. However, this may also be because Moridin was most likely using the True Power, drawn from the Dark One, rather than saidin.
"When anything is destroyed with balefire, it ceases to exist before the moment of its destruction, like a thread that burns away from where the flame touched it. The greater the power of the balefire, the further back in time it ceases to exist. The strongest Moiraine can manage will remove only a few seconds from the Pattern.... For as far back as you destroy [something], whatever it did during that time no longer happened. Only the memories remain, for those who saw or experienced it." [The Fires of Heaven: 6, Gateways, 119]