MTG: Mutavault - how does it work?
The card works in much the same way as other "Manland" type cards. You pay the activation cost, it becomes a 2/2 creature with all creature types, and for the rest of the turn it behaves exactly as if it was a 2/2 colourless Llanowar elves (NOTE: this includes summoning sickness. As long as its just a land you can tap it for mana as you could a regular land. If you turn it into a creature straight after playing it however, it has summoning sickness and you CANNOT tap it for mana).

You effectively play this card by utilising its attacking abilities at the right times, it is essentially a "free creature" at the cost (which can be a benefit) of turning it into a creature for 1 mana per turn. 

The fact that it starts out and reverts to a land makes it safe from sorcery speed removal much of the time, the fact that it is all creature types makes it very potent in some tribal decks (legacy/modern merfolk), and the fact that it acts as a land until the point that you need it to be a creature makes your deck much more stable for casting expensive spells.

If it dies as a creature, it dies. Note that spells that say "target non-land permanent" can't target it, it may be a creature, but its still a land. It doesn't revert to being a land if it dies, it goes to the graveyard just like anything else.

The card is expensive because of it's proven track record, and it is a very powerful example of a man land due to its low activation cost and positive tribal interactions. Merfolk decks will commonly activate this as a 4/4 or 5/5 creature.