Interestingly, the torture room is called "Room 101"; 101 is always the basic course in which the fundamentals of a course are taught, so the essential fears are learned and then the prisoner is subjected to them. By subjecting a person to his or her greatest and most essential fears, the torturer can tap into the terror of that person's soul, and, thus, break that person psychologically more easily.
In Book III, Chapter 2, O'Brien manipulates the controls of the machine that causes Winston excruciating pain; worst of all, O'Brien knows what Winston is thinking. And, when Winston evinces some will power still, O'Brien decides it is time for Winston to go into Room 101, knowing that this room of torture touches at Winston's more basic fears. It is the final place--the breaking point for every one.
Once Winston is put into Room 101, O'Brien looks down at Winston.
More than ever he had the air of a teacher taking pains with a wayward but promising child.
For, O'Brien knows that Winston will break under his greatest of fears.
Room 101 is different for everyone. Inside Room 101 is every person's greatest fear and for everyone their greatest fear is very different. O'Brien describes Room 101:
"The worst thing in the world varies from individual to individual. It may be burial alive or death by fire, or by drowning, or by impalement, or fifty other deaths. There are cases where it is some quite trivial thing, not even fatal."
For Winston, Room 101 contains the rats. He is terrified of rats. Inside Room 101 O'Brien has a helmet he has fashioned in which there are rats and if certain doors on the helmet open the rats, hungry rats, will be released to gnaw off Winston's face.
The point of Room 101 is to ensure the final stage of reintegration, acceptance.
Room 101 was the place where the worst thing in the world was found. Winston had previously asked O’Brien to tell him what exactly was in the room because he noticed that all the prisoners who had been taken there were terrified at the mention of it. O’Brien then informed Winston that everybody knows what is in the room, even Winston. However, he highlighted the fact that the worst thing in the world varied from person to person because it was the thing that each individual feared most. The worst thing in the world surpassed pain and was unendurable. In Winston’s case, the worst thing in the world was rats and his fear for rats was used in the final stage of integration to force acceptance. Winston finally betrayed his commitment to Julia and submitted to Big Brother’s will.
Room 101 holds the person's worst fears, its basically a torture chamber for people who are going against big brother or have been caught in thought crime, etc..
It is the room where one's secret and deepest fear will be used against them to torture them into acceptance.