Khyber is said to be the body of one of the three Progenitor Dragons that created the world of Eberron. It is a massive subterranean realm that is filled with Fiends, Aberations, Daelkyr, and sleeping Rajahs that were bound by the Dragons and the Gatekeepers.
One of the regions of Khyber is the Vault of the Keeper where souls taken by Keeper's Fangs are delivered. There, an ancient Draconic Lich claiming to be the Keeper lords over them and inflicts hellish suffering upon them.
Behind the Scenes Edit
Khyber seems to be a composite of the D&D idea of the Underdark and certain traditions that place Hell, literally, underground.