There's a big and dandy ego death thread I saw on the main page, it probably has the most info.
But basically its where (in my experience) you lose all sense of self (ego), and exist only as something, but with no self-labeling.
Then of course you get into the whole, 'if i'm looking at myself so externally then who is this observer who is my consciousness?'
ah, but I still haven't got my head around all the nuances of ego death, so definitely check the big and dandy ego death thread.
This will probably get merged into it anyways.