UNIX CLI scripting

I ran into the :(){ :|:& };: command the other day (didn't run it, of course), and I realized that I have no idea why this works. I'm assuming it's something built into the shell.
Googling a collection of punctuation marks yielded absolutely no results, as expected.

Now, I *assume* this meta-language is used for accomplishing something other than forkbombs. Anyone know what it's called / resources to find out more about it?

>>1 lrn2computer nubcakes.
"man bash" much? also lpd's advanced bash scripting guide.

PROTIP: it's about implicit functions

Translation:

bomb(){
  bomb | bomb&
}

bomb