It was widely known as a "free city". These were cities generally regarded by both sides as having no industrial or strategic importance. Dresden itself was a cultural centre, with noted architecture in the Zwinger Palace, the Dresden State Opera House and it's historic churches.
The fire-bombing consisted of dropping large amounts of high-explosive to expose the timbers within buildings, followed by incendiary devices (fire-sticks) to ignite them and then more high-explosive to hamper the efforts of the fire services. This eventually created a self-sustaining 'fire storm' with temperatures peaking at over 1500 degrees C.
Although precise numbers are difficult to attain, documentation of the rescue operations puts the number of dead at about 25,000. Larger numbers seem to derive from claims by Propaganda minister Joseph Goebbels, he added a 0 to the numbers of bodies, cremated and estimated dead on the final report from the police. The accepted sources show some variation, and 35,000 or up to 50,000 are possible.
The Dresden bombing is a very debated decision, and one that still doesn't seem to have a justification of military necessity.
For details on the falsification of numbers, you can read Lying About Hitler (ISBN 0465021522).
There are anecdotes of the pilots and crew having problems years later. Some had nightmares, some thought they would go to hell as war criminals, some had unshakable visions of the fires and the burning cities.