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The 1 Ring can only be found by fishing, referencing the discovery of the One Ring by the hobbits Déagol and Sméagol while on a fishing trip (in Tolkien's Lord of the Rings).
This item can be found by fishing in any low level fishing area, such as the canals in Stormwind and other fishing areas in Horde and Alliance main cities and secondary areas. However, it has an extremely low drop rate and even an avid fisherman is unlikely to ever see one.
The 1 Ring has very good stats for a level 10 ring (required level); rings of a comparable level buff one stat one point. Even so, it is not a great ring - by the time you really need the extra edge from items for battlegrounds or instances, there are other choices with as high a total stat bonus, and with focused bonuses that help specific classes.
jokingly referred to in the item's tooltip has actually been implemented, and can be found in game as of Patch 2.4.0.