Vampires are members of any of the races native to Tamriel that have become infected with the disease Porphyric Hemophilia or Sanguinare Vampiris. This can be contracted after being bitten by a vampire or simply through contact during fighting with vampires. Once you have the disease you have around three days to cure it or you will become a Vampire the next time you sleep.
Being a vampire has its own inherent advantages and disadvantages. At the lowest level of vampirism, it is possible for vampires to 'blend in' with the rest of society and even go about a normal routine in daylight. At higher levels vampires are immensly powerful creatures with increased strength attributes and an array of additional powers, however they will take sun damage when outside during the day, other characters may refuse to even speak to them for fear of becoming a meal! It is also possible that town guards will attack vampires on sight. Although it is possible for even the highest level vampire to return to the lowest level of vampirism simply by feeding on a sleeping victim, although this does also remove the higher level powers and attributes.