The Pleiades is an open cluster located in the constellation Taurus. This is a region of hot, young, blue stars formed approximately 100 million years ago.
The dust seen is extrinsic, meaning that the cluster is merely passing through a dusty region of space; the dust from the creation of these stars has long dissipated.
This has always been one of my favorite celestial objects. Very bright, very hot, and visible without a telescope!
Check out this great map of the Seven Sisters from Wikipedia.org: