This picture is very cool. And very pretty!
That's a test of the PICA-X (Phenolic Impregnated Carbon Ablator) material, a variant of the material NASA uses on its heat shields to protect astronauts during re-entry. It was developed by the private company Space X to use on their Dragon capsule, which will ferry materials and astronauts into space. In the pictures, it's being blasted by a very hot (up to 1850 C) arc jet at the NASA Ames Research Center.
When the Dragon capsule re-enters, it will violently compress the air in front of it. A compressed gas heats up, and that's why materials coming back from space must be protected. PICA (originally developed by NASA) actually heats up, melts, and blows away (ablates), taking the heat with it. Enough material is coated on the windward surface to make sure it lasts through the whole process. In a sense, it's like sweating, but on a somewhat grander and scarier scale.
Dragon is slated to launch sometime this year on a Falcon 9 rocket. Space X has not yet launched a Falcon 9, but plans on doing so soon.
Image courtesy Space X.