Alfheim is the homeland of the Elves is, as the name suggests. The elves in pre-christian mythology and religion of the Norse and other Germanic peoples were/are a class of demigod-like beings.
Alfheim is only mentioned in passing a few times in the old literature and is never described in detail. The 12th century eddic prose, Gylfaginning by Snorri Sturluson describes it as one of the abodes in heaven: "That which is called Alfheim is one, where dwell the people called lhosalfar [Light Elves]; but the dokkarlfar [Dark Elves] dwell down in the earth, and they are unlike in appearance, but by for more unlike in nature. The Light-elves are fairer to look upon than the sun, but the Dark-elves are blacker than pitch." [empahsis mine].
The elves, on the other hand, have a more prominent place in the source literature and tradition. They are described as being luminous and more beautiful than the sun. To envision the elves, just think of the elves in The Lord of the Ring series. If their homeland is at all like them, which it should be, we can assume that their homeland was a gracious realm of light and beauty. The nine worlds that Norse cosmology are never listed as such and so we have to make some assumptions and educated guesses. However, given the importance of the elves in Germanic religion Alfheim was one of them.
I'm Dr. Dave, a modern druid. I lived and worked in Bolivia and Peru for over six years, where I and was trained by Andean Shamans, and today practice modern druidism and contemporary shamanism.