In Warlords of Draenor, this item will be added to the new Toy Box feature and no longer take up a bag slot. You will be able to "use" the item straight from the Toy Box interface.
The Toy Box will be account-wide and therefore so will this item.
The chalice is a solve from the Dwarven branch of Archaeology. It requires 100 x Dwarf Archaeology Fragment (or less, if you use up to three Dwarf Rune Stone).
After a patch during some time in Cataclysm, at least one of the dwarven dancers is out of sync, and still is today, even when upon a completely flat surface. :(
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