Holika Dahan, burning of woods or lighting of fire, is one of the most important ceremony during Holi festival. It symbolically represents the victory of good over evil. On the night before Dhulhandi, people light fire with old wood, sticks, branches and leaves. In 2009, the date of Holika Dahan is March 10.
In most regions, Holik Dahan is associated with Demon Holika attempting to kill young Prahlad and in that attempt gets herself killed. Young Prahlad is saved by the grace of Lord Vishnu. In some regions, people believe that Prahlad was saved by Lord Agni.
The day is observed as Hutashani Purnima in some regions. You can find more details about Holika Dahan and the legend associated with it in this article.