There are hundreds of reports coming in from around the net going up on the official Blizzard forums, tons coming into the WoW Insider Tip Line, and the problem has been experienced by every staff member here that's been on the PTR.
You can move no more than a few dozen paces in Dalaran without there being a critical error that causes WoW to crash.
There were some early reported rumors that the problem is linked exclusively to ATI video cards, but I can say beyond a doubt that such is not the case – I have an nVidia GeForce GTX 260 I'm getting crashed every few minutes while in Dalaran.
The best way around this problem is to head to the landing pad and get the hell out of there. The problems seem to go away when you leave the city. I recommend heading to the north eastern corner of Icecrown and checking out the Argent Tournament.
We'll let you know when we see more than a "we're looking at it" blue response to the situation. In the mean time... good luck!
PS: If the blues are reading this, and I know several that do, I have some freshly made TPS reports which you can fill in. That might help expedite the fix.
Patch 3.1 brings us Ulduar, dual specs, significant changes to all the classes, and more! We've got you covered from top to bottom with our Guide to Patch 3.1.