That's the sound you make when you're falling to your death after dropping your sandwich on the keyboard, causing you to dismount while 600 feet in the air.
(That's also the sound you make when playing on beta, and Blizzard makes every 17 feet have a flying deadzone that randomly dismounts you)
Anyway, Aieeeeee! will save you the hassle of falling-death repair bills. When it figures out that you're about to paint the pavement a nice shade of pinkish-red, it'll go ahead and take all your durability-affected gear off, so that you don't get any messy bloodstains on it. I mean, it took you so long to farm the mats for that Mooncloth Robe, it'd be a real shame to stain it and have to take it to the dry cleaners AGAIN. Those Mooncloth tailors really need to figure out how to make a machine-washable robe.
Aieeeeee! will also go ahead and put your gear back on when you rez. Or if you survive. But it's kinda disappointed if that happens, because then it can't really do its job.
Do Aieeeeee! a favor today. Go throw yourself off a cliff. It'll thank you for it, and you'll thank it.
It seems that IsFalling() returns 1 when you initially log in. One character was mostly stripped when the loading screen went away, while another character seems to keep his clothes on even though the chat window tells me that I'm falling for my death.
Doing an UI reload doesn't invoke any silly messages nor leave me naked in the Ironforge bank.
But it did work when I took a leap off the Aldor terrace, good stuff!
Edit: Also, jumping and touching the ground as little as possible between jumps seems to after few jumps trigger the nudism mode.
Edit2: Bleh, sorry, I'll just post a ticket.