While they are churning, the Universe sends out all sorts of obstacles to scare them off. One was a giant pool of poison that threatened to kill all the Devas and Asuras, as well as destroy the three worlds.
Shiva came out into the water, and drank the poison. His wife, Parvati, held his throat so he wouldn't actually swallow it, turning his throat blue. He is named 'Blue Throat' in Sanskrit as well.
There are other stories of Shiva in his aspect of Nataraja (lit. "Lord of dance") doing the famous Tandava, describing the stages of the Universe - creation, preservation, destruction. I found a bunch of cool stories here: http://www.hindu-blog.com/2007/02/
Unlike a lot of other holidays, this one doesnt have a lot of food and celebration. Most devotees fast (I wont be. blergh!) and pray all day/ night, washing their statues of Shiva with milk, honey, water, offering flowers, fruit. I'll be going to Yoga, which seems to be exactly the right thing to do.
Its on the night of the new moon, which can symbolize a time for "evil forces" – desire, greed, illusion, arrogance, jealousy, and anger to take control. My intention tonite is to ask for strength to see through the 'evil' and find the truth. I dont believe in 'dispelling' emotions, or that they are in themselves 'evil' - how we act on them can be seen as good or evil, but the feelings themselves are all good, all from our purest self - they are signals to us to search for the truth.