At it's root, Caffeine is a Psychoactive Stimulant that creates a physical dependence.  Short version: when you rely on Caffeine to give you energy or wake you up, your body starts requiring the drug rather than waking up it's self.  Mixing sugar, which is a nutrient that acts like a stimulant, and caffeine can cause additional dependence.  It does have some benefits however in addition to providing quick bursts of energy.  It is an ingredient in medications to keep people awake, migraine headaches and also menstrual cramps.  

In small amounts, it's main side-effect is elevated heart rate.  Larger doses cause the "jitters", hyperactivity and nervousness.  It is difficult to overdoes on Caffeine however, people with heart conditions OR people who mix excessive amounts of caffeine with Alcohol, have been known to have heart attacks

Personal note from Mr. Corabi:  I used to drink a ton of Mountain dew all through middle school, high school and college which is one of the highest amounts of caffeine in any soda.  In 1996, I was diagnosed with an irregular heart beat.  Luckily, the treatment for me was to limit or eliminate caffeine from my diet.   For years, I didn't drink any caffeine products at all.  Now, I'll drink unsweetened Ice Tea and usually feel fine although, I technically still have the condition but rarely know it's happening.