A few things have changed just lately, and i have found the following to be quite a good guide on mounts in wow, apparently you can now get your flying at 60 and fly around all of the old worlds, but you still have to wait until 68 until you can fly in burning crusade land… and then you can fly in Northrend, but you need to have cold weather training from another character if you want to do that before 80. Argh so much to remember, good thing i have this list below:

Azeroth is a large world and it’s recently become much larger. There are hills to climb, deserts to explore, fjords to ford, and a vast sea separating the continents. And lets not forget that beyond Azeroth proper there lies a whole other shattered world — Outland. Traveling has never been more interesting, and for some, confusing. To help you with getting around, weve compiled a list of some of the more common ways you can see the world, meet new creatures, and (likely) be killed by them.

Mounts: Mounts come in all shapes and sizes, and each race has its own type of mount that becomes available at level 20. Youll need to learn how to ride, of course, and then you’ll need to keep your feet on the ground until level 60 when you can take to the skies — after purchasing the flying skill and a flying mount.

Apprentice Riding
Level 20

Journeyman Riding
Level 40

Expert Riding
Level 60 (Allows for flying in Outland)
The Burning Crusade

Artisan Riding
Level 70

Master Riding
Level 80

Cold Weather Flying
Level 68 (Allows for flying in Northrend)
Wrath of the Lich King

Flight Master’s License
Level 60 (Allows for flying in Azeroth)
Cataclysm

*Tip – Hitchhiking: Some mounts are designed to carry more than one person, so you can always try to catch a ride with a friend.

Flight Masters: For a little pocket change, you can get a lift from a Flight Master. Youll need to find the flight paths (as indicated by the green exclamation (!) point) and learn the route before you can fly to many destinations, but they should be easy to find as you explore. Its important to note that there are flight paths that can be used by Alliance only, Horde only, and by both. These are noted on your map as red for Horde, blue for Alliance, and gold for Neutral (both factions can use.)

Boats: Boats are free to use, and while the crew may look like they have loyalties to the Horde or Alliance (depending on the harbor they make their home), they will never attack their passengers. The residents of the harbor, however, may have other things in mind. Most boats dock in Alliance ports and can be an inconvenient means of transport for the Horde, though Booty Bay in the Eastern Kingdoms runs a neutral port.

Zeppelins: These flying contraptions may look like floating death traps, but they use the best in goblin technology… so yes, they’re probably death traps. You cant beat free airfare, though, which is surprising given the goblins’ greedy nature. Much like the boats, zeppelins are faction-neutral, but perhaps more difficult to use for the Alliance.

Portals:
Portals are magical constructs that allow travel from one location to another.
Mage Portals: They may cost you — either because the mage is charging a fee or youre generously leaving a tip. These portals are created by a mage and allow party members to travel through them. When traveling alone, mages can teleport themselves without opening a portal.

NPC Portals: NPCs can sometimes help you get where you need to go, though their transportation methods are generally attached to a quest or progression path.
Static Portals: Many portals offer travel to a fixed destination. These can be found in a variety of locations.
–Orgrimmar:
The Western Earthshrine – Offers portals to Hyjal, Vashjir, Deepholm, Uldum, and Twilight Highlands after you’ve completed the quests that guide you to these new Cataclysm zones.

Tol Barad – Found near the Western Earthshrine, you must be level 85 to enter this world PvP zone.
Blasted Lands – Found in the Valley of Spirits, you must be level 58 to use this portal. It delivers you safely to an outpost just outside The Dark Portal.

–Stormwind:
Blasted Lands – Found in the Wizards Sanctum, you must be level 58 to use this portal. It delivers you safely to an outpost just outside The Dark Portal.
The Eastern Earthshrine – Offers portals to Hyjal, Vashjir, Deepholm, Uldum, and Twilight Highlands after you’ve completed the quests that guide you to these new Cataclysm zones.
Tol Barad – Found near the Eastern Earthshrine, you must be level 85 to enter this world PvP zone.

–Outland Portals:
The Stair of Destiny: Offers portals to Orgrimmar and Stormwind on either side of the Dark Portal.

–Neutral Portals:
Shattrath: Within the Terrace of Light, a portal transports those of the appropriate level to the Isle of QuelDanas.
Dalaran: Within the Violet Citadel, a portal is available for travelers heading to the Caverns of Time to defend Azeroths timeline from the machinations of the Infinite Dragonflight.
Within the Sunreavers Sanctuary (Horde) and the Silver Enclave (Alliance), portals are available for Wintergrasp, Strand of the Ancients, Warsong Gulch, Alterac Valley, Arathi Basin, Eye of the Storm, and Isle of Conquest. (Note that queuing for Battlegrounds can be done anywhere from within the User Interface.)

Summoning:
When theres no portal available, you can ask your friends for a helping hand. Players can be summoned by using a meeting stone outside of a dungeon (level requirements need to be met) or by utilizing the services of a warlock.

Special:
Many additional means of transportation around the world become accessible via quests, special items, or NPCs, but there are two specialized methods that we just couldnt leave out.
Rocketway Exchange: The goblins have arrived, and with them, a little extra goblin ingenuity. You can find the largest of these Rocketways in Azshara.

Deeprun Tram: Running between Ironforge and Stormwind, players can take this underground train for free and easy transit between the two cities.

Edit – 18.01.2011 :  (i was wondering what the difference was between, artisan riding and master riding) found this excellent table from wowwiki I have added for convenience below:

Skill granted	Proficiency	Riding	Friendly	Honored	Revered	Exalted	Required for	Necessary level
75	Apprentice	4	3 80	3 60	3 40	3 20	Mounted riding (+60% movement speed)	20
150	Journeyman	50	47 50	45	42 50	40	Faster mounted riding (+100%)	40 with Apprentice
225	Expert	250	237 50	225	212 50	200	Mounted flying (+150% in the air)	60 with Journeyman
300	Artisan	5000	4750	4500	4250	4000	Faster mounted flying (+280%)	70
375	Master	5000	4750	4500	4250	4000	Fastest mounted flying (+310%)	80[1]
n/a	Flight Master’s License	250	237 50	225	212 50	200	Allows flying in Kalimdor, the Eastern Kingdoms and Deepholm	60 with Expert or higher
n/a	Cold Weather Flying	500	475	450	425	400	Allows flying in Northrend	68 with Expert or higher
Total Price		11054	10501 30	9948 6	9395 90	8843 20

This post comes via: Cataclysm Stuff

So what is it and how do i get it!? /sarcasm (semi on)

Provided that you are already past the level requirement of felwood, you should have no problems aquiring this tasty item.

1. Go To Felwood
2. Talk to Arcanist Delaris, pickup the Do the Imp-Possible Quest
3. Do all the following quests from this dude, until you come across the final quest of the chain Open Their Eyes

Once you have completed the quest Open Their Eyes you will recieve the (ZOMG) Rainbow Generator…

And yes it does hit for about 11 on a mob that is level 47. So watch out, Oh and it comes with a full 10 minute cooldown, just to stop u spamming the 11 damage ranbow and therefore overpowering your class…