What they are:
Fragrance oils (FO) are synthetic (man made) chemicals that are mixed together and are designed to smell like natural materials. They are NOT natural and 95% of the chemicals found in fragrance oils are derived from petroleum. Some of the chemicals found in fragrance oils are benzene derivatives and aldehydes. EVEN UNSCENTED AND FRAGRANCE FREE PRODUCTS CAN CONTAIN CHEMICALS DESIGNED TO MASK THE SMELL OF OTHER INGREDEINTS (and most people think buying unscented means there are less chemicals. Ugg)
There is minimum government regulation and monitoring and there are 80,0000 to 100,000 chemicals being used today with more than 1000 new synthetic chemicals added yearly. Most have not been chemically tested individually or in combination to find out their effects on human health. The fragrance chemicals do NOT have to be listed on the product label because Trade Secret laws keep these secret compounds from being exposed. (I have been learning that in the health and food industry, secrets are usually not a good thing).
Why they are bad:
Professor Anne C. Steinemann, Civil and Environmental Engineering and Public Affairs of University of Washington has an awesome website http://depts.washington.edu/exposure/ that talks about reducing human exposure to toxins.