Although this causes no extra threat specifically, doing normal weapon damage to four enemies at once can go a long way to keeping aggro in a cluster of mobs. Also, each individual hit has the normal chance of going critical. 2 or more criticals from a large two-hander can make a decisive difference to the average cluster mob furball. Also, it looks damn cool.
The rage cost is a little on the steep side, so this is best used in conjunction with Berserker Rage to compensate. Note that unlike most warrior abilities, this one is truly AoE, and will effectively hit targets directly behind the warrior.
This ability is extremely effective against both single enemies, and multiple enemies while your 31 point talent is on cooldown (Bloodthirst, or Mortal Strike). It's better than heroic strike against single enemies, because it's an instant ability, and doesn't eat up the rage you'll generate for your next hit. And it's better than cleave against multiple enemies, for the same reason. It does have a cooldown however, and if you find that you have excess rage to spend, heroic strike, or cleave can still be used in conjunction with this.
Also of note, is that this ability gets even more efficient the slower and harder hitting your weapon is. While it's better for 2 handed weapon users, it's still useful for 1 handed weapon users, due to the fact that it's the only instant damage attack we've got besides our 31 point talent abilities (which have a cool down as well). Note: With the changes to it in 2.3 (It hits with both weapons now) it's now better to use two slow one handed weapons.
Be careful of crowd control with whirlwind however. You shouldn't be breaking your teammates sheep/shackle/seduce.
This attack also has an additional use in PvP- due to the fact it can hit anyone in melee range regardless of where they are attacking you from, it can be used to teach a lesson to that irritating Rogue who is constantly backstabbing you.
With its 8 yard range, it can hit enemies in your dead zone (Allows you to hit enemies too close for you to intercept / charge, yet still far enough that if they're out of your melee range, you can hit them)
Once you get Titan's Grip, Whirlwind causes very high damage, making it worth fitting in all your rotations, even single target. After all, causing instant damage with double two handers is always good.
Patch 2.4.2 (2008-05-13): Now has the correct sound associated with it.
Patch 2.3.0 (13-Nov-2007): This ability now strikes with both weapons when a Warrior is dual-wielding.
Patch 1.8.0 (10-Oct-2005): Now uses normalized attack power.