Mashadar was the evil of Shadar Logoth, created from the same evil that consumed the rest of the city (TEotW, Ch. 19). It appeared as tendrils of silver grey fog, drifting across the city, oozing out of the buildings as night falls, which give off their own light, enough to see in the darkness (TEotW, Ch. 20). Though it kills, it somehow left Liah alive after she vanished there when Rand visited to place a trap around the Waygate (LoC, Ch. 20; ACoS, Ch. 41). Though disoriented, she was able to recognise Rand and he used balefire to kill her, so that she would not be taken by Mashadar (ACoS, Ch. 41). Sammael was killed by it, Mashadar filling the whole square surrounding the Waygate he was guarding (ACoS, Ch. 41). Mashadar and the rest of Shadar Logoth was destroyed when Rand cleansed the taint (WH, Ch. 35). Robert Jordan confirmed that Sammael was killed (December 12, 2000 - CNN chat transcript)
"The evil of Shadar Logoth, Mashadar. Unseeing, unthinking, moving through the city as aimlessly as a worm burrows through the earth. If it touches you, you will die" (Moiraine, The Eye of the World, Chapter 20).
"Mashadar is vast, girl, as vast as Shadar Logoth itself. The whole White Tower could not kill it. If I damaged it enough to let you pass, drawing that much of the One Power would pull the Halfmen like a trumpet call. And Mashadar would rush in to heal whatever harm I did, rush in and perhaps catch us in its net." (Moiraine to Egwene, The Eye of the World, Chapter 20).
The thickening tentacles of fog swung uncertainly for a moment, then struck like vipers. At least two latched to each Trolloc, bathing them in a gray light; muzzled heads went back to scream, but fog rolled over open mouths, and in, eating the howls. Four leg-thick tentacles whipped around the Fade, and the Halfman and its black horse twitched as if dancing, till the cowl fell back, baring that pale, eyeless face. The Fade shrieked. There was no sound from that cry, any more than from the Trollocs, but something came through, a piercing whine just beyond hearing, like all the hornets in the world, digging into Rand's ears with all the fear that could exist. Cloud convulsed, as if he, too, heard, and ran harder than ever. Rand hung on, panting, his throat as dry as sand (The Eye of the World, Chapter 20).