#2 - Dec. 6, 2006, 8:46 p.m.
What!? You didn't get epic loots!? ;)
No seriously, it's just for some of the instances in Outland. You can set some of the pre-70 instances to become level 70 instances which are more difficult and give better loot. The option doesn't apply to anything in Azeroth currently.
I say currently as there is the possibility (although no plans at this time to do so) that we could add the same Heroic mode to current dungeons.