There have been two different Wells of Eternity. The glowing, swirling pool known as the First Well of Eternity (usually just called the Well of Eternity) was once a lake containing immense arcane energy. It was originally located on the ancient continent of Kalimdor near the ancient night elven city of Zin-Azshari. The present area where the First Well of Eternity was located became the Maelstrom after the Great Sundering following the War of the Ancients.
The Second Well of Eternity is a massive pool of water infused with raw magic at the base of the World Tree. Coveted by demons, warlocks, and many mages, the well is currently the greatest source of arcane magic in the world. While the World Tree's powers have suppressed the corrupting nature of this magic for centuries, if the tree were ever destroyed, this Well would be the source of unfathomable power to an evil creature powerful enough to wield it.
Ten thousand years before the orcs and humans clashed in their First War, the world of Azeroth cradled only one massive continent, surrounded by the sea. That landmass, known as Kalimdor, was home to a number of disparate races and creatures, all vying for survival amongst the savage elements of the waking world. At the dark continent's center was a mysterious lake of incandescent energies. The lake, which would later be called the Well of Eternity, was the true heart of the world's magic and natural power. Drawing its energies from the infinite Great Dark Beyond, the Well acted as a mystical fount, sending its potent energies out across the world to nourish life in all its wondrous forms. It was probably created by the Titans.
The WarCraft III manual, and other sources, imply that the Titans carefully placed the Well, but the War of the Ancients Trilogy implies that the Old Gods were able to harness it (all of the World Tree's power came from the Aspects), so we can't be sure.
Later, Sargeras convinced Queen Azshara and the Highborne to create a portal in the well, leading to the first invasion of the Burning Legion. Following the War of the Ancients, the Well of Eternity was destroyed, and most of Kalimdor with it, leaving only the Maelstrom,a huge unstable whirlpool filled with magic that can only be seen on the WOW map.
However, Illidan had filled seven magical vials with water from the Well of Eternity, and he poured three of the magical vials of water into the lake at the top of Mount Hyjal, creating a new Well. For this insane act, his brother Malfurion and the demigod Cenarius imprisoned him deep beneath Mount Hyjal. The new Well was completely covered by the growth of Nordrassil, its malevolent magics lost with the enchantments of the Aspects.
However, Illidan had not emptied all of his vials in creating the second Well of Eternity (which is why the Aspects were able to enchant the World Tree with no interference). Somehow, the Highborne under the leadership of Dath'Remar had acquired one of the remaining vials and, after founding their new homeland of Quel'Thalas, used it to create the Sunwell. At least two of the last three vials somehow found their way back into Illidan's possession, and he gave one each to his lieutenants, Lady Vashj and Kael'thas. They remained in their possession until the Scale of the Sands recruited adventurers to take them back. These vials are now in the hands of Soridormi, prime mate of Nozdormu.
Speculation about the final vial remnant points to its original host, Illidan Stormrage. It is unknown whether or not he was in possession of it at the time of his death at the former Temple of Karabor, Black Temple.
The only current way to see Nordrassil and the Well of Eternity is to go through the Caverns of Time. Although its waters were once fatal, it now only gives a debuff of Eternal Silence. After leaving the waters the player suffer from Residue of Eternity.
Night elf origins
The theory that night elves were actually trolls mutated (or evolved, depending on your point of view) has been a source of great discussion among fans. Blizzard recently posted the following information in their Troll Compendium:
Little is known about the night elves' precise origins, for their race was formed so long ago that no hard evidence has surfaced to prove or invalidate this theory. All that is known for certain is that a tribe of nocturnal humanoids came to live on the shores of the first Well of Eternity, and the Well's cosmic energies changed them into the night elves we know today.
Certainly many trolls do believe that the humanoids who developed into the night elf race were trolls. The theory does have some credibility, for there is at least a superficial physical resemblance between trolls and night elves. Furthermore, the troll race dominated much of ancient Kalimdor — the only continent on Azeroth before the Great Sundering — long before the night elves came into power.
Nevertheless, many night elves find this theory preposterous and abhorrent. They are quick to point out that the first night elves began their rise to power by defeating a number of nearby troll tribes. As a consequence, the trolls came to fear and respect the might of their new rivals. The troll theory of night elf ancestry may have been a direct result of this early conflict. The trolls hated the night elves — a sentiment that persists to this day — and may have wished to marginalize the night elf race and its accomplishments. Also, attributing the night elf race with a troll heritage likely helped the trolls come to terms with their own shocking defeat.
Without additional data, there is little point in debating the merits of this controversial theory. No doubt it will remain a matter of contention for years to come.