In the Old Tongue, "The Unseen World", a world that reflects the waking world in strange ways. Non-living objects in the real world have their counterparts in Tel'aran'rhiod according to how permanent they are in the real world - a building will be stable in Tel'aran'rhiod but things that only remain in the same place in the real world for a short period of time will only appear in Tel'aran'rhiod for a while before vanishing out of existance, possibly being replaced by some other ephermal object.
Tel'aran'rhiod is also the World of Dreams. When people are dreaming they may occasionally touch the world of dreams and appear in Tel'aran'rhiod briefly, playing out their dreams. This is dangerous however, because anyone that dies in Tel'aran'rhiod dies in the real world - they simply never awake from their sleep.
There are people who can enter Tel'aran'rhiod voluntarily. Dreamwalkers are people who have the ability to enter Tel'aran'rhiod in their dreams under their own control and can manipulate things there. Those who can talk to wolves often enter the Wolf Dream, which may simply intersect Tel'aran'rhiod, or it may be the same thing.
Certain ter'angreal also allow people to enter Tel'aran'rhiod in their sleep - some require channeling, some do not. Also, powerful Aes Sedai can create a gateway to Tel'aran'rhiod, allowing them to physically enter the World of Dreams. This is said to rob people of their humanity however, and Aiel dreamwalkers expressly recommend against it.
In the World of Dreams a person can control their environment and appearance through willpower, changing things to suit themselves. The bigger the change, the more control and willpower it takes however, and the shorter period of time it will last, although no change is permanent.