Using it makes you hostile to both Alliance and Horde no matter which faction you're on... so flagging you for PvP except both sides can attack you. You can only attack others with PvP on or others using the Censer. You get a bloody coin each time you kill someone, and those are spent on rewards like the Mushan mount etc. It says all of this on the item itself and the front page.
EDIT: Oh and if you're killed then the buff wears off.