Google Dance is out-dated slang term used to describe period of time in which Google used to rebuild its rankings, and as result of this rebuilding, rankings of Web sites on Google's SERP may fluctuate in order during a several day period. Google Dance would happen anywhere up to 36 times per year.
The quality and nature of the "dance" is unpredictable though. One day it's a slow Waltz, the next Google cranks up to Trance!
Google dance is definitely one aspect that really drives me nuts. Ranking fluctuation isn't a good thing. But we just have to live with it and do what we need to do. Linkbuilding is supposed to be a continuous process.