it's a bristle worm. some people like them, and some do not. it really matters what you want. they're awfully pretty to look at, and really aren't a danger to your tank, but just like anything else sometimes they can overpopulate. you can avoid this by having predators in the tank. i'm not sure if emerald crabs eat them, but i know for a fact arrow crabs eat them. i saw one eating a bristle worm at my local store today. the only thing is they sting really badly if you touch them, so if you have him in your tank you'll want to be careful if you're messing with the rockwork, cleaning the tank, etc. i had a couple attached to an urchin believe it or not, but i removed them with a pair of tweezers because i didn't want to have to worry about them when i had my hands in the tank...
don't know about the venom but it sure doesn't feel good my finger just turned a little red. I was at the LFS looking through live rock and I was like oh look at the little worm and bam!
Obligatory picture. Sorry, love posting that pic.. really shows a bristle worm good. They are one of the most common "hitch hikers" that come with live rock. They are good cleaners IMO. Think of one of those big fat pencils you had as a kid and that is the size of the worm.
I suggest that everyone wear gloves when working in saltwater tanks. As most of the creatures that we keep have some sort of defense measures. The biggest problem is with secondary infections, such as Marinium bacterium. A friend of mine got it when he got stuck by a bristle worm. Had to go through a major antibitotic treatment to get it under control.
As to bristle worms they are great cleaners in a tank.