Bottom of the Well

In Ocarina of Time, Kakariko Village was home to a well. It is also called the Well of Three Features. That well was the entrance to a Dungeon, which contained an underground chamber in which the sacred Lens of Truth was hidden. When Link became an adult, the well was sealed, and when he was a child, it was temporarily filled with water. In order to enter the dungeon, young Link had to play the Song of Storms to super-charge the Windmill and drain the well dry.

The well contains many illusionary walls and floors which could only be identified as fake using Lens of Truth, while in other places floors were invisible requiring the Lens of Truth once again to reveal such illusions. Deep within the Bottom of the Well, Link fights one of the freakiest foes imaginable, Dead Hand, which will yield the Lens of Truth upon death. However, it is possible to skip the majority of the well and acquire the Lens of Truth in less than 10 minutes, making the only alternate reason anybody would want to go through the whole thing is to pick up some Gold Skulltula Tokens.

On the whole, this dungeon is completely optional, having no effect on the plot or completion if not attempted. However, without the Lens of Truth, not only will the last two temples and Ganon's Castle be of immense difficulty, Link may miss out on many hidden Heart Pieces and treasures only the Lens of Truth can uncover throughout Hyrule itself.

Master Quest
In the Master Quest version of Ocarina of Time, the Lens of Truth are no longer useful in the dungeon, because all fake floors and walls are now visible to the naked eye. The reward for fighting Dead Hand is the compass, though a Small Key is found in its room. The Lens of Truth are now found on the bottom floor; the one with poisonous water, which is now full of boulders and, a Wallmaster and five ReDeads all together. The Green Bubble is now missing, as well as the Like Like and the Beamos. The room with coffins and Gibdos is optional, too, containing only a Gold Skulltula. There are some hidden switches in the walls that unlock doors or drain the well; and playing Zelda's Lullaby in front of the statue unlocks some gates now. The new enemy here is a Floormaster.

Minor Enemies and Traps
ReDeads  Gibdos  Green Bubbles  Like Likes  Beamos  Wallmasters  Skulltulas  Gold Skulltulas  As well as invisible floors, fake walls, trap floors, and poisonous water.

Trivia

 * According to the old man in Kakariko Village, the house of a man who could see the truth once stood on the location of the well.
 * The Dead Hand mini-boss that guards the Lens of Truth is possibly the same mini-boss fought in the Shadow Temple for the Hover Boots, although in his second appearance, or the new Dead Hand's first appearance, the Dead Hand possesses more hands in the ground than in the previous encounter with a Dead Hand in the well.
 * It is strongly believed by Team Beta Triforce as well as the Zelda hacking community in general that the Bottom of the Well was at one point the Hyrule Sewers which Link needed to go through to get in and out of Hyrule Castle in the beta.