Description:
Bristleworms range in size from small (about 1" long) up to very large at about 20" in length.  Most small ones are an orange color, sometime appearing two-tone in color.  Larger bristleworms are frequently gray or brownish in color.  Bristleworms are composed of many segments and have bristles (setae) which extend from both sides of its body along its entire length, hence their common name.  These setae are clearly visible in the picture above.  Bristle worms live in the sand or within the live rock.  They are nocturnal and not usually seen during the day.

Good or Bad?:
This is a tough one.  Historically, bristleworms were all considered to be bad.  Most literature warns that they can attack and eat clams, anemones, corals and even fish. 

Recently, most hobbyists have come to the conclusion that small bristle worms pose no threat to other tank inhabitants and are in fact good scavengers and add to the biodiversity of the tank.  You can even buy bristleworms from some sources.

Even large bristleworms are starting to be better understood.  Although it appears that some large bristleworms can be aggressive predators, these seem to be in the minority.  Many large bristleworms seem to fall into the harmless scavenger category.  The one in the picture above has been in one of my tanks for several years.  It is about 1/3" across and at least 12" long although I have only seen about 6" of it.  It lives next to a group of clams and has never shown any interest in bothering the other creatures in the tank.  He is a very impressive looking specimen in his own right.

Notes:
Look for bristle worms at night with a flashlight to see if they are present in your tank.  Feeding the tank in the evening will sometimes cause them to come out and feed.

Capturing large bristleworms, if you desire to do so, can be difficult.  They are secretive and primarily nocturnal.  Large ones should not be captured by hand due to their sharp pincher teeth and setae which can puncture the skin.   One way to capture large ones is to place a rock with a hollow on the bottom side onto the sand in the evening.  A piece of shrimp or similar can be placed into the hollow to act as bait.  The next day the rock can be removed and the worms will come out with the rock, or they can be captured using a net or tweezers and disposed of.  There are also traps available on the market.  Biological controls are sometimes mentioned.  Several species of Wrasses, Copperbanded Butterflyfish, Banded Coral Shrimp and Arrow Crabs are all suppose to eat bristleworms, but I doubt that they will eat the large ones which are the only ones to possibly be concerned about.  My recommendation is to leave them alone unless you have reason to believe they are causing damage.  Also be aware that when an animal, such as a clam dies, the bristle worms will frequently feed on the carcass as will any scavenger.  Many people misunderstand that the worms are only scavenging and falsely assume that the worms killed the clam or other specimen.