faction change will copy your factions over (except Tranquillien, since there's no alliance version of that faction) so if you were exalted with Thrallmar you'll now be exalted with Honor Hold, Mag'har = Kurenai, Orgrimmar = Stormwind, etc
also you WILL keep all of your gear, again mounts will change to alliance versions where appliccable
Upsides of swapping:
join the underdog faction with (I think?) faster bg queues
there's not much else that happens, which is why the factions remain skewed, there's no motivation for more than a handful of people to swap over
Downsides of swapping:
you can't go back horde for free because there's always much more hordes than alliance