Lava is the most deadly terrain. Unless you are levitating or immune to fire stepping in lava means instant death. The same is true for monsters. If you attempt to step into lava that you can see, you will recieve the message "That would be certain death!" and the move will be cancelled. However, if you cannot see the lava (for example, due to wearing a cursed Ring of Clairvoyance) the game will allow you to step to your fiery death.
Lava also acts as a light source. Any tile within two spaces from the lava is illuminated, so if you're going for a stealth build, it's recommended that you give lava a wide berth whenever possible.
As of 1.7.1, throwing an item into lava creates a 1 cell gout of flame, which can ignite flammable gas clouds or anything that flies into it. If the gout is created next to flammable terrain, flammable items (scrolls), or mobs, there is a chance that fire will spread from the lava to the adjacent spot/entity.