It is basically a term used to describe an increase in body temperature to levels which are above normal (37.8 degrees centigrade) and is synonymous with fever.
Pyrexia can be classed as low grade (38-39 degrees), moderate (39-40), or high grade (40 +) depending on how much the body temperature has deviated from normal.
It may be of benefit and is part of the body's response to a disease however if the fever goes above 42 degrees then it may cause significant tissue damage and would most certainly be harmful.
Fever usually occurs in response to pyrogens (e.g. prostaglandins) which are released from inflammatory cells. These pyrogens act on the hypothalamus (basically the body's thermostat), resetting it to a higher temperature and in doing so invoking the body's temperature raising mechanisms and raising the body temprature to a level above normal. The body's temperature is maintained at that level until the effects of the pyrogens wear off.