What is Alterac Valley?
Alterac Valley is a 40-man per side Battleground situated in the Alterac Mountains. It is a vertically-oriented map that has been criticized as being imbalanced in some areas as favoring one or the other faction. It certainly is the most asymmetrical Battleground map, and until Patch 2.4 had the Horde starting closer to the middle of the map than the Alliance. The game can be won in two ways: killing the enemy General and whittling down enemy reinforcements to 0. Each side begins with 600 reinforcements, which can be reduced by achieving various Battleground objectives.
The various reinforcement-affecting objectives are as follows:
Killing the enemy Captain takes away 100 reinforcements. Captain Balinda Stonehearth is the Alliance Captain, while Captain Galvangar serves the Horde.
Burning down an enemy bunker or tower takes away 75 reinforcements. There are four towers per side, for a total of 300 reinforcements. Additionally, burning down a bunker or tower eliminates an Alliance Marshal or Horde Warmaster respectively. These elite NPCs serve as the Generals' bodyguards and increase the Generals' total health by 25% each (for a total of 100% additional health if all four are up).
Killing an enemy player reduces enemy reinforcements on a 1:1 basis.
Capturing a mine will grant 1 reinforcement every 45 seconds.
There are other Battleground objectives which do not directly affect the win conditions but have strategic value. The most important of these are the Graveyards, which can be captured thus giving teams more places from which to resurrect. Ideally, the graveyard captures is a forward motion, allowing teams to continue their push towards the enemy base.
There are also Wing Commanders held in enemy territory who grant 25 bonus Honor for each one who makes it safely back to the base. Though most games will never see it, Wing Commanders provide some strategic value when the Call of Air quests are completed. Enemy players and NPCs drop items which are turned in to a Wing Commander who has made it back to base; if enough of these have been turned in, gryphons or wyverns will take to the skies and bombard enemy players from above.
The most important and obvious Battleground objective are the enemy Generals who are holed up in their respective keeps. Drek'thar is the Frostwolf General who commands the Horde forces while Vanndar Stormpike is the Stormpike General who leads the Alliance. Killing the enemy General will reduce enemy reinforcements to 0, winning the game.
What's the deal with Alterac Valley, anyway?
Back in the day when orcs were savage, bloodthirsty, demon blood-drinkers (nowadays they're just savage and bloodthirsty), the Frostwolf clan was exiled to Alterac for not having a taste for bloody marys from hell. They are led by the blind Shaman Drek'thar, who taught Thrall the ways of Shamanism and helped found Orgrimmar. So the next time you young Alliance punks barge into Frostwolf Keep, keep in mind that you're dealing with a major badass from World of Warcraft
Alright, so that's the story of those orcs. On the flip side, we've got these artifact-loving dwarves who send an expedition out into the mountains to learn more about their heritage, i.e. digging for old Titan artifacts. As we all know, if there's anything that dwarves love as much as beer, it's rummaging for old stuff. This dwarven expedition is led by Vanndar Stormpike, who is by all appearances a Mountain King. Obviously, the orcs don't appreciate all that digging into their sacred land and appear to hate booze every bit as much as demon blood. So there you have it -- enough good, juicy conflict of interest to start a war.
The physical entrance to Alterac Valley is located in the foot of the Alterac Mountains, north of Hillsbrad Foothills. While you won't actually need to queue up there anymore, there are quest givers in these areas who give reputation and item rewards. Most notably, the reputation-based trinket which allows players to teleport to Frostwolf Keep or Dun Baldar can only be obtained from Warmaster Laggrond and Lieutenant Haggerdin, respectively.
Did you mention something about reputation?
Alterac Valley is the third and last Battleground to have PvP reputation associated with it. As with Warsong Gulch and Arathi Basin, performing quests and achieving Battleground objectives in Alterac Valley grant reputation with the Frostwolf Clan and the Stormpike Guard. While Blizzard is of the opinion that Battleground reputation is an outmoded concept, I'm an old school player who actually enjoyed it. Before the change to their costs, most Alterac Valley items could be purchased only after achieving a certain reputation with the associated faction.
It's easier these days as players no longer have to worry about reputation and simply have to accumulate honor and Alterac Valley Marks of Honor. The items are pretty good epics for their level, as well, so are pretty good rewards after some games while leveling. Alliance players can get the Hero of the Stormpike Guard Achievement and Horde players can get Hero of the Frostwolf Clan. Players who manage to get exalted with all three old school Battlegrounds reputations can get the Justicar or Conqueror titles for their trouble, so the reputation grinds aren't a total loss.