Among the more charming features of the original Diablo was the fact that it had a background deeper than required (or expected) from a game which was more of a carnage-based item-hunt than a true RPG (no offense to any Diablo enthusiasts-- It's quite fun, but it's not an RPG). Almost a third of the manual or more consisted of background information, and several books were scattered in-game to unravel the story. Azurewrath is a part of one of these tales:
"The greatest of these heroes [of the Great Conflict] was Izual, lieutenant to the Arch-Angel Tyrael amd bearer of the Angelic Runeblade Azurewrath. He once led a fierce attack upon the Hellforge as the creation of the dark demonblade Shadowfang was nearing completion. His quest was to destroy both wielder and weapon - a charge that he was destined never to complete. Izual was overcome by the legions of chaos, and, tragically, was lost to the Darkness. His fate stands as a testament to the fact that Angels and Demons alike shall fearlessly enter into any domain - so long as their hated enemies dwell within."
Diablo II seems unfortunately lacking in this sort of detail. The manual does shortly explain the events that occured after the original game's storyline, but many quests are only passingly related to the main plot.
(back onto topic...) Azurewrath and the other elements of Izual's story turn up in the final act of Diablo II (unless one counts Lord of Destruction). Both Azurewrath and Shadowfang are unique swords, and Izual himself (along with his former leader, Tyrael) appears as a corrupted enemy near the Hellforge.