The SqlTransaction.Rollback method is equivalent to the Transact-SQL ROLLBACK TRANSACTION statement. For more information, see SQL Server Books Online.
The transaction can only be rolled back from a pending state (after SqlConnection.BeginTransaction has been called, but before SqlTransaction.Commit is called). The transaction is rolled back in the event it is disposed before Commit or Rollback is called.
Try/Catch exception handling should always be used when rolling back a transaction. A Rollback generates an InvalidOperationException if the connection is terminated or if the transaction has already been rolled back on the server.
For more information on SQL Server transactions, see "Explicit Transactions" and "Coding Efficient Transactions" in SQL Server Books Online.