The forest consists of dead trees located in a barren land. The reason the name suggests pain is because of all the sharp and pointy plants in their barren landscape, which consists of the trees pointy branches and that there are patches of thorn bushes everywhere.
There is nothing else known about the Forest of Pain other than the events shown in Secrets of the Masters. After encouraging Rhino, Ox, and Croc to work together in stopping the Wu Sisters, Oogway escorted the trio to Hubei Volcano where the sisters' fortress was located. They walked through this forest along the way.