It is a serial bus protocol, with a capacity of up to 400Mbps, or 800Mbps in the IEEE1394-b standard (known as FireWire800). FireWire can support up to 63 chained devices.
FireWire is typically used for digital video systems (DV) to connect the camera to a computer. It's high speed allows rapid download of DV to a host system. It's also used for external harddisks, scanners, and can be used to connect two computers together.
You can use gscanbus to see what is plugged into your FireWire port.