A little bit of history...
First, we're going to talk about why we have this cool tool. Back in the days of "Additional instances cannot be launched," the servers were set up so that each realm had its own instance server. At least, this is how we understand it, because Blizzard doesn't exactly share its network layout.
However, before Wrath, people didn't run that many instances. It was something that guilds did, but not something the general player base got into. When Wrath hit and pugging became the cool new fad, the instance servers weren't ready for it. To stop the servers from collapsing under the burden of so many instances being run on them, Blizzard implemented a cap on the number of instances that could run at one time. This made instances nice and stable, but very difficult to get into and causing the "Additional instances" problem we all came to know.
That was just a stopgap fix until they could implement their big plan. In order to fix the issue with "Additional instances" they removed all of the instance servers from being attached to a single realm and let them be available to all realms in their battlegroup. Now, if your old instance server was completely full, you just got sent to an instance server that still had slots available on it. Tada, "Additional instances" is now fixed. Again, this is a guesstimation as Blizzard won't release that info.
This opened up a lot of possibilities for Blizzard. Since your instance servers were shared throughout the battlegroup, that means you suddenly had the opportunity to do an instance with anyone from your battlegroup. All you need is a swank interface and away you go. Okay, we're oversimplifying, but that's essentially what they did. Let's take a look at it.
Quick and Dirty Dungeons...
I've included a gallery at the end of this guide if you want to see the same text next to images to see what I'm talking about a little better.
If you hop into World of Warcraft right now and hit your button for the old Looking for Group window, you'll get the new 'Dungeon Finder' instead. It looks kinda close to how the old one was laid out. You've got your role selection at the top of tank, healer or DPS. You've also got the option to be the leader of the party.
However, where it differs is that instead of the normal selection of your 3 dungeons, heroics, or raids, you've got a quest. Not only that, but at 80, it's your heroic daily quest. All you need to do for the daily is hit 'Find Group' and you're in like Wrynn. Lower level characters will get a cool goody bag which can include blue quality items for leveling and dungeon running.
Give it about 2 seconds (that was the average I was getting on the PTR, but your mileage may vary) and you'll be told what role you'll be filling as well as what quest rewards you should be expecting upon completion of this dungeon. I used that graphic for the opener.
Hit 'Enter Dungeon' and you'll see a little ready-check window pop up. That will let you know if everyone else has hit their enter dungeon buttons as well. Check marks are the people who are ready, question marks are the people you're waiting on. If you get a big red X on one of the members (in my case, the healer declined), then the Dungeon Finder will pop your pre-assembled team out of ready and find a replacement. You're still at the top of the queue, so the first appropriate healer that pops up is yours. It will repeat the same ready-check procedure until it finally gets everyone assembled and ready to enter the dungeon.
Please note that at this time, you still haven't had to talk to anyone, form any parties, or debate who is the healer and who is dps.
Once everyone is actually ready, you will be teleported directly to the dungeon. You will not pass the meeting stone, you will not fight the door boss for the right to enter the dungeon. In the default UI, each party member will have an icon for their particular role on their party nameplate. Healers are marked with the same little plus sign as in the Dungeon Finder screen, dps has a little dagger (or maybe it's a sword), and the tank has a shield icon. The party leader even gets a little flag icon. Isn't it cute? Thanks to this, there is no confusion about who does what. After everyone is buffed, the shield just checks to see if the plus sign is ready and pulls.
If everything goes smooth and you kill the final boss of the dungeon the quest rewards pop up in your inventory. If you leave through the dungeon entrance, you'll be teleported back to where ever you were when you hit 'Enter Dungeon' and you can just repeat the process again for more loot and rewards.