Lebloom,
This stuff looks like a small anemone. Mine are very small. It is attached to my live rock at the base, has a stalk that extends upward, and has a head with many tentacles around the edges that sway in the current. It is typically a deep purple in color, and will multiply out of control extremely quickly if left alone (or so I am told). It stings, as well, so it is dangerous to fish and you.
Do peppermint shrimp eat this stuff? My LFS says to get a whole herd of peppermint shrimp to keep the aptasia down.