Caffeine and alcohol are not an inherently dangerous combination, but in excess the effects of each substance can cause dangerous conditions. The primary problem with caffeine and alcohol is the illusion that one is not intoxicated because the caffeine helps to counteract the fatigue associated with alcohol. This sometimes leads to drinking more than one should, feeling that one is capable of operating a motor vehicle, or simply injuring one's self by intoxication-related falls. Common urban legends about caffeine and alcohol involve the idea that caffeine somehow counteracts the drunkenness one experiences when drinking excessively, which is patently untrue.
The most common relationship between caffeine and alcohol is the one imposed on the two substances by drinkers. It is very common for drinkers to combine caffeine and alcohol either in the same drink or by drinking the two substances in close succession. For consumers, the intended effect is a sense of being awake while still maintaining an alcoholic buzz. This is usually achieved quite satisfactorily by the combination of two substances. When problems with this combination arise, they are due primarily to drinking in excess, which is often more tempting when feeling the precise sensations associated with being both caffeinated and drunk.
A variety of studies appear to show that people who drink both caffeine and alcohol are more likely to attempt to drive home drunk or vastly underestimate their impairment. This social effect is primarily due to misinformation about what this combination actually does. As long as one understands that a firm and quantitative amount of alcohol fully precludes one's legal ability to drive a car, one will not experience this side effect. While it may seem subjectively that one is still capable of driving, in the eyes of the law one is still intoxicated.
Caffeine does not help a person sober up after drinking. It may promote alertness, which can often help a person sit in a place and refrain from drinking long enough to sober up. The effects of alcohol must wear off over time and cannot be counteracted by drinking a caffeinated beverage.
Whether or not drinking caffeine and alcohol together is more dangerous than drinking one substance on its own is up for debate. On the one hand, it appears that people who drink these substances together tend to drink more overall, but these drinks happen to be highly popular with a social crowd that tends to binge drink in the first place. It is difficult to tell if these statistics are due to the inherent qualities of caffeine and alcohol or to the people who enjoy that combination. In general, it is a good idea to simply set a limit on the amount of either substance one will drink in a night for safety reasons.