From Diablo Wiki
The Pandemonium Event is a series of Diablo 2 Expansion end game quests available only on Battle.net. The "event" requires players to kill various high level bosses, collecting items that can ultimately be transmuted to create a portal to where the final battle takes place.
Refer to the appropriate page in the Diablo 2 wiki for full details.
It's not known if there will be special high level, end game content of this type in Diablo 3, but most fans hope to see something along these lines return.