Recently, a Know Your Lore got kind of derailed by supposed pictures of Kil'Jaeden, Tichondrius, Archimonde and Sargeras from someone's private server. It's hard to say whether the models are "real" or not, just because there's so much you can do on a private server. You can spawn mobs wherever, shrink things, blow things up, wear GM weapons, and teleport anywhere.
Now, officially, private servers are A Very Bad Thing/Illegal/Against TOS. I'm not sure of the exact nature of the wrongness, but Blizzard definitely frowns on this kind of thing. So we definitely don't condone private servers. However, just like account sharing, gold buying and that jerk who constantly camps the rooftops in HFP, private servers are part of WOW culture.
Experiences with private servers seem to vary. Some people I know have tried them and find them lacking. What fun is a game when you can waltz right in and do anything you want? It's cool for about fifteen minutes, and then boring. On the other hand, I've seen the opposite side.
I was able to play on a private "sandbox" server with no NPCs in the BC alpha for about two hours last fall, and while I now admit that that was Wrong and Bad of me, I still had a great time. Playing with the character creator before anyone else, seeing the new Outland zones and guessing what was going to be there, even reading the little notes the GMs wrote on the landscape ... it was awesome. But I don't think I'd do it again -- playing there was too risky, even for a short time, and I don't want bad things to happen to me or whoever's computer I happen to be playing on.
Have you ever been on a private server? What do you think of the concept?