The Stone of Cold Fire was a flying rock that Littlefoot saw. Sometimes this stone also referred to as the "the source of ultimte power" or "that cold fiery stone thingy." It has been theorized that it is actually a divine booger that had been sneezed out by an omnipotent being. During the events of Rocks Fall, Everyone Dies these two aliens disguised as dinosaurs come to the Great Valley and reveal that the Stone will grant the one who touches it over 9000 levels of power. This turns out to be true, as the evil flyer Pterano successfully reaches the stone and is granted god-like powers in return.
...other than that, it's just an ordinary rock falling through space.