Fractals are basically mini dungeons broken up into 4 levels (3 semi-random)+ (1 Boss) battle with each level progressively harder than the last. A higher difficulty scale increases the # of mobs and their levels while increasing the chances at better loot. http://wiki.guildwars2.com/wiki/Fractals_of_the_Mists
Starting at lvl 10 you will have a chance at Ascended rewards with increasing odds every 10 levels higher (10/20/30/40/50). Starting at level 10 there will also be an “Agony” debuff that causes you to lose health every second. It can be countered using AR (Agony Resistance) which are found only in the Infusion slots of Ascended Gear. Higher difficulty scales will require more AR to have the same effect.
http://wiki.guildwars2.com/wiki/Agony
Fractals are a good way to earn Karma and the daily “Pristine Fractal Relics” reward can be traded in for Ascended Rings (10 each). You will also receive regular “Fractal Relics” which can we traded for other rewards including the Exotic backpiece “Prototype Fractal Capacitor” which can be upgraded to Ascended Quality.
