Gouge is a core rogue ability learned at level 22. It is a useful ability that incapacitates the target for a short period of time. Once a successful Gouge has been made, any damage will negate its incapacitation effect. Note that using Gouge will turn off auto attacks.
Gouge's short stun is the main reason for using the ability, allowing one to get into position for utilizing [Backstab] (if subtlety spec), performing a quick bandage, or getting a few seconds to distance yourself and get out of combat.
Gouge's effect breaks upon receiving damage; this means that it does not work well with [Garrote] or [Rupture], or in group combat unless well-coordinated. However, in all situations Gouge is useful as an interrupt. If [Kick] is on cooldown, Gouge can be used just for the purpose of interrupting a spellcast.
[Backstab] (subtlety spec) is a great skill for dealing burst damage, but you must be behind the mob to use it. Gouge first, then move behind the mob to enable you to Backstab.
Facing multiple enemies can be quite difficult. Simply gouge one. This will give you time to finish one of them. This will greatly reduce the amount of incoming damage.
In end-game raiding, Gouge has proven useful in interrupting caster enemies if they are immune to stunning with [Cheap Shot] or silencing with [Kick]. It may be expensive energy wise, but it will at least buy time and prevent extra damage to your fellow raid members.
/Patch 3.0.2 (14-Oct-2008): Gouge is now only 1 rank and causes damage based on attack power.
Patch 2.1.0 (22-May-2007): This ability will no longer trigger poisons (and thus break itself).