Pahoehoe Lava is a fluid; a type of lava-flow characterized by the smooth, billowy surface. It is much less hot and viscous (thick) than vanilla Lava. Pahoehoe Lava in IndustrialCraft² is a constant 1200°C and it can burn you. The word "Pahoehoe" comes from the Hawaiian verb hoe, "to paddle" (since paddles make swirls in the water).
In IndustrialCraft², Pahoehoe Lava is not natural (contrast with real life). It is exclusively produced by cooling lava with a Liquid Heat Exchanger.
Pahoehoe Lava is molten Basalt. It will eventually dissipate enough heat to freeze (if placed in the world), but you can accelerate the process by convection (place another fluid next to the Pahoehoe Lava), much like regular lava. Fluids with temperatures of 400°C and below (such as Coolant) will quickly freeze Pahoehoe Lava into Basalt. Note that only source blocks produce Basalt.