It's essentially a second vanish. I can think of two ways of using it this racial as a Rogue.
Shadowmeld doesn't trigger Subterfuge. However, you can instantly Stealth after Shadowmelding (since it puts you OoC immediately), triggering Subterfuge.
Shadowmeld allows you to use your stealth openers. With Cloak and Dagger, you can Shadowmeld+Garrote/Ambush/Cheap Shot instantly, teleporting you behind your target. Essentially, you can teleport in PvP midfight without using Vanish or Shadow Dance.
Same as above, except for triggering Find Weakness without using Vanish or Shadow Dance.
Night Elves make great Rogues IMO and Shadowmeld is a great racial ability for Rogues and opens up new possibilities.
Thoughts and what other uses there might be for Shadowmeld? (please refrain yourself from saying "Human > all for the Alliance", this is NOT what this thread is about. Thank you).