This rune effect transforms the arrow into a ball of energy with "shadow tentacles" extending out and wiggling as they move along. The projectile moves quite a bit more slowly than normal arrow attacks, which can make them hard to hit fast enemies. A fast Demon Hunter can actually outrun or Vault right past the orbs as they float along.
Each of the Nether Tentacle orbs can only hit the same target once, but each orb can hit an unlimited number of enemies, and they deal the full damage and life leech with each hit.
Patch 1.0.3 nerfed this skill so that each orb can only hit the same target once. This greatly reduced the power and popularity of the skill, and most players choose Ball Lightning since those orbs have a wider range of hit.
The orbs are a mixture of black and red which flows in a shifting pattern as they move along, and the tentacles on the outside flow and writhe like undersea arms of an anemone. They're better seen in action than in screenshots, and they can be very fun against an Elit with the Missile Dampening modifier, since that will slow all the orbs down to nearly motionless speed and dozens can be stacked up in a row.
That's seen in the video below, which was taken back before Patch v1.0.3 nerfed the skill so each orb only hits a single target.