I think (not sure!) you only have to change one setting in the server's config file to enable/disable cross-faction.
What would cross-faction imply? *You can choose from this list, you don't need all.
- Chat would be understandable by all factions (maybe only channels and group channels, not /say)
- You could form groups with members of all factions, allowing for cross-faction raids
- Cross-faction RDF
- Guilds can have members of all factions
- Cross-faction battlegrounds are currently not supported (http://truewow.org/forum/viewtopic.php?f=78&t=16347)
- Battle for Wintergrasp - same reason as bgs
- Arena teams
- Vault of Archavon has conditions for the Alliance/Horde loot, how would these work if there were both Horde and Alliance in the group]?
- Trial of the Champion/Crusader has an Alliance and Horde version of an encounter. How would this work? Remove ToCh from RHC?
Note from the Staff: As mentioned in "What would it NOT imply?" This suggestion does NOT include crossfaction PvP (NO crossfaction bgs, NO crossfaction arenas... NO crossfaction PvP).