Carbon fiber is a fiber that is composed mostly of carbon atoms (also known as graphite fiber). Although a light weight material, it is extremely strong. While four and a half times less dense than steel, it is more than twice as strong. It can be shaped into many forms, whether it be cloth, or solid plates. However, this high-tech material does not come cheap. For example, the cost of a carbon fiber hood for a car can cost as much as $2000.
This amazing fiber consists of threads much thinner than human hairs, that are woven together to make a fabric which can then be left as-is, or covered in a resin to harden into any desired shape or mold. Carbon fiber is highly sought after in many different sports, ranging from auto racing due to its weight saving ability, to golf where it is used to optimize shaft flex which equals the ability to hit the ball further
Carbon fiber is very much like graphite in structure when viewed by X-Ray crystallography. This is odd because while graphite is very soft and easily broken or bent out of shape, carbon fiber is quite strong and very hard to break. While they have their differences, they are also very much alike under the right conditions, one example of this is that they are both brittle. Interesting to note is that at 25000C, carbon fiber will become pure graphite.   
From the visual aspect, carbon fiber in naturally a black, obsidian color, with a woven pattern to it. It is possible to change the color, the most popular way of doing so being the use of paint on the hardened epoxy covering.
Carbon fiber's greatest properties would be its physical ones. It is extremely light, and extremely strong. For example, carbon fiber has more than twice the tensile strength of steel. Carbon fiber is also 4.5 times less dense than steel, while retaining a specific strength of 2.00 as compared to 0.17 for steel.  
Carbon fiber is made up of carbon filaments, that are woven together to make a thread. This thread of carbon atoms is extremely thin at 0.005-0.010 mm in diameter, or roughly one-fifth the width of a human hair. The crystals in the carbon strand are mostly parallel in a certain direction so that it has a "grain" to it, making it stronger across one axis, and weaker across the other. Generally, a few thousand of these tiny strands are woven together to make a thread that can be used to make carbon fiber "cloth" or fabric. If desired, this strong material can be hardened by coating it with an epoxy and then molded into a specific panel to be used on a car or plane for example.   
Because of carbon fiber's great strength-to-weight ratio, it is used in various applications, generally as a means of saving weight.
The use of carbon fiber is very prevalent in the auto industry, where shaving weight in sports cars is quite important (see carbon fiber reinforced polymer). By making hoods, trunks, doors, roofs, and other body pieces out of carbon fiber, auto designers can save alot of weight, making the car faster, more efficient, and handle better. Before the invention of weight saving materials such as carbon fiber, in order to make the cars perform better, they had to give them more power. Now however, they make the cars not only quicker, but perform better all around by making them lighter. Also, because carbon fiber is brittle, like graphite, it has a tendency to shatter rather than bend. This is very useful in making these cars safer in the event of an accident because all of the force of impact is dispersed through the shattering, rather than being transferred through the rest of the car via crumpling. 
Carbon fiber can be found in athletics as well. It is being applied to baseball technology by making bats that have carbon fiber shafts to optimize flex, resulting in the ability to hit the ball further. This same technology is being used in many golf club shafts as well. Carbon fiber can even be found at track meets where it is used to make light weight, high-tech prosthesis' for participants who have lost limbs. Even tennis rackets are being made of carbon fiber now, because it is so light, it makes it easier for people to generate more speed with their swing, making it easier to blow the ball right past their opponent.
Also, carbon fiber sees use in various other fields such as aviation and spaceflight where it is used to, again, reduce weight and improve strength. Of note it can also be found in instruments, fishing rods, boats, hockey sticks, archery bows, mountain bikes, and even eating utensils
Matthew James Last updated: 15.6.02
Michael Anissimov Last Modified: 08 April 2010
Chemistry Daily 2005