Night Reaver is a two-handed axe. Double-edged and weighted for extra damage, this axe is also afflicted with a shadow curse that may cause extra damage. It's high-end damage and proc make an excellent axe for any low level warrior.
Night Reaver is dropped only in Shadowfang Keep. It isn't dropped by any particular mob, defined as a world drop, but rather is found throughout the keep, albeit at a very low drop rate.
This is considered the second best two-handed axe for a level 19 warrior twink. This is why it can be worth hundreds of gold; it's very rare and people who want the second best twinks in the game think it's worth it.