By slowing the enemies' attacks it effectively decreases the damage they inflict on you. This makes it especially useful when tanking.
Thunder Clap is useful for tanking when a warrior needs to multi-tank a large number of mobs. Other than Challenging Shout (which is on a 3-minute cooldown) and Shockwave (the 51-point protection talent), the warrior has no other real abilities that cause threat on multiple enemies at once.
Due to Improved Defensive Stance, Thunder Clap does only 1% less damage in Defensive Stance, while it does 10% more threat than it would in Battle Stance, and 22% more than it would in ImprovedBerserker Stance
At level 80, Sunder Armor will generate 590 threat in Defensive Stance (without factoring in any damage inflicted by Devastate). An untalented Thunder Clap will generate (300+(12% of AP)) damage (about 580 for pre-naxx prot gear). Thunder Clap has an innate 175% threat multiplier. This hit generates (damage * 175%) (1005) threat in battle stance, though probably less, since the damage of the Thunder Clap is mitigated by enemy armor. In this respect, even an untalented Thunder Clap can be considered an "AoE sunder".
Spending talent points in 3/3 Improved Thunder Clap will increase the damage it inflicts, which also increases the threat generated. If you have the talent Improved Thunder Clap 3/3, along with Improved Defensive Stance, you can generate more than Sunder-level threat (max. threat in Defensive Stance: ((580 * 200% * 90% * 110%) * 175% * 130%= 2612) on an unlimited amount of NPCs for each Thunder Clap. In any multi-mob tanking situation, Thunder Clap should be used whenever possible.
Certain warrior glyphs can also help Thunder Clap. A minor glyph, Glyph of Thunder Clap, can be used to increase the radius of TC by 2 yards. Glyph of Resonating Power reduces Thunder Clap rage cost by 5. Thunderclap has a base cost of 20 rage. This can be reduced to by 3 to 17 with Focused Rage, by 4 to 16 with Improved Thunder Clap, by 7 for both talents. All these could combine to bring your rage cost of Thunder Clap down to a measly 8 rage.
Be careful using this ability around crowd controlled mobs, as the damage it inflicts will likely break the crowd control effect. If possible it is best to apply Thunder Clap before crowd control, or to pull the mobs you wish to Thunder Clap away from the sheeped/sapped/trapped/etc. mobs. Also be careful of using this around a mob your group's hunter is trying to draw into a Freezing Trap, as it may make it more difficult for the hunter to establish aggro on the mob.
Thunder Clap can be useful against melee PvP opponents, as it reduces their ability to inflict damage. Its AoE effect against opponents makes it especially useful in large battles.
Thunder Clap creates threat equal to 1.75x damage done.
Thunder Clap's damage is physical and is mitigated by the armor of the opponent.