In the World of Warhammer, Night Goblins are a subterranean Goblin subspecies. They are atrocious fighters, poor marksmen, indisciplined and poorly equipped. They have the dubious distinction of being even more cowardly than "Common Goblins", and yet they compensate for this in a number of notable ways. First and foremost is the fact that even in the grim, apocalyptic Warhammer Fantasy setting, they are in fact pretty funny. Or if not funny, at least likable. This may not seem such a great virtue in a tabletop battle game, until we consider the other armies on offer in terms of personality. Bretonnia (French), The Empire (German), Skaven (rats), Chaos (scary), Dwarfs (dour, bearded midgets), High Elves (effeminate metrosexuals), Woody Elves (effeminate hippies), Dark Elves (effeminate sadomasochists), Lizardmen (slimy), Chaos Dwarfs (nobody in the world, not even Games Workshop, cares about Chaos Dwarfs), The Tomb Lords (dead Egyptians), Vampire Counts (dead goths) and Ogres (a cynical moneymaking exercise, and considering how cynical Game Workshop can be, this is quite an achievement). Therefore, it is nice to have an army with a bit of character and charm.
As for background, they live in dank caves, where they spend their days killing dwarfs, killing each other and eating large quantities of psychotropic fungus (I'm not making this up). They are fed such mushrooms on the battlefield in order to invoke psychotic episodes, which I suppose is GW's subtle little bit of anti-drug propaganda. For pets, they capture and raise squigs. These are homicidal red balls, with large teeth and small feet. They are made of the fungus Night Goblins like to eat, and sometimes they explode.
They are also outrageously easy to paint (think a can of black spray paint, and then filling in the gaps with green), a huge advantage in a Warhammer army. They are cheap (not to mention cheerful) and tend not to faff about with Dragons, Chariots and whatnot. They are given to random acts of destruction, distributed fairly evenly against yourself and your opponent (this doesn't concern you however, because your guys are utter rubbish and your opponent's are not). They possess the tendency to fold in an extravagant manner. In boxing terms, they never win or lose on points, either collapsing in the second round or (and this does occasionally happen) inexplicably dominating the game. The quality of your victories will outweigh the quantity of your defeats. They are for those who prefer the thrill of the game to a high probability of victory. They lose to Elves (remember the effeminate guys?) with impressive consistency, as they fear them for some unfathomable reason. Beating a real army with your Night Goblins is the source of serious credibility amongst fellow gamers. Beating Elves with your Night Goblins is Nobel Prize material ("And the Nobel Prize for pushing painted pieces of plastic and metal across a table goes to..."). Therefore, if you wish to start playing Warhammer but do not intend to re-mortgage your house and leave full time employment, I can strongly recommend a bunch of Night Goblins. Love them.