This piece of gold, chaps, can be best summed up by the following quote:

Dwarf fortress is a free 2D ASCII-based real-time strategy game. At first blush, it looks a lot like NetHack, which is arguably true. However, NetHack does not give you control of anywhere from seven to two hundred and fifty dwarves, with orders to build them...well...something resembling a fortress.

As any long-time player will tell you...dwarves are fucking stupid. Shockingly so, in fact. At least one of the two is almost guaranteed to fall in if you have them dig a pit. They can go crazy and starve while crawling around the kitchen stockpile, gibbering. They can go into strange moods and butcher a dwarf to make a pair of artifact pants out of dwarf leather. (And these are some of the more normal things that can happen.)

The Dwarf Fortress Wiki will have all the information you would want, as well as a download of the game, and newbies are advised to check out Your First Fortress to at least smooth out the steep learning curve a bit.

Dwarf Fortress is much more entertaining if you use a "bloodline" system, where multiple people take turns playing the same game. Hilarity ensues, as the Saga of Boatmurdered will tell you.

And above all, never forget that losing is fun.