Player killing, also known as PKing/PvP is the fact of combatting another player.
The most popular place to PK is the Wilderness which hosts the largest territory of PvP enabled areas aswell as being dangerous as all items are dropped on death (if skulled without protection prayer, or the 3 most valuable items determined by their high-alch value). Other player killing areas include mini-games such as the Fight Pit, Castlewars, Duel Arena, Clan wars. Although these mini-games are safe upon playing, meaning you will not lose your items on death.
In beginning November Runescape released two new Player Killing worlds. In this worlds, players can fight everybody 15 levels under and above their combat level. Example: 30 Combat pker can attack people between 15 and 45. In this worlds, skulls are back! That means, that you're getting a Player-Killing-Skull with bones over your head if you attack your opponent first. If you die with a skull you lose all your items (if you don't use any prayer like protect item). These worlds are very useful for pures to make money, because they can attack low level players and get their items (if skulled).
The loot that can be gained from deafeating an opponent in dangerous PvP areas can be any items that the other player was holding, ranging from shrimps to whips.