|The Fugue Plane as presented in Neverwinter Nights 2: Mask of the Betrayer.|
Other Cosmologies If you're using the World Tree cosmology (3e), details on the Fugue Plane are in the Player's Guide to Faerun. If you're using the World Axis cosmology (4e), details on the Fugue Plane are in the Forgotten Realms Campaign Guide. You can use this article to flesh out your portrayals in those cosmologies, but the actual question of where the Fugue Plane fits has already been resolved for you.
References and Systems Endnotes [numbers in square brackets like this] reference sources for much of the information contained herein. When a monster or other game mechanic is mentioned, I've tried to split the difference and include references to both Pathfinder 1e and D&D 5e. In 1e, there's not much to reference (everything should be in the Manual of the Planes), and in 2e everything is scattered across various Planescape resources. If you're still playing D&D 3e but in the Forgotten Realms not using the World Tree cosmology, then look at the Manual of the Planes, Dungeon Master's Guide 3.5, and Player's Guide to Faerun.
A Quick Lesson On The Afterlife In the Forgotten Realms like many D&D settings, those who die go to the Outer Planes to join their patron deities as petitioners, until they eventually fade away into the deity's power and the essence of that Outer Plane. In the Forgotten Realms specifically, dead souls do not head directly to the Outer Planes. Instead they instinctively find portals to the Fugue Plane, where the god of the dead judges them and sends them to their finality. The style and manner of this judgment depends upon the current god of the dead. During the publication history of the Forgotten Realms, this has changed multiple times: Myrkul (until 2e), Cyric (early 2e), and finally Kelemvor (late 2e, 3e, 4e, and likely 5e. The Sword Coast Adventurer's Guide suggests that Kelemvor still judges the dead, and that he holds the dead as his portfolio still.) Ultimately, judgment results in one of three outcomes: being found a good worshiper and sent on to join the dead's patron deity; being found Faithless (atheist) and mortared into the Wall of the Faithless to suffer and eventually dissolve; or being found False (misrepresenting deities or being fickle in worship), in which case the dead soul is sent to the City of the Dead for punishment.
Planar Traits The Fugue Plane is an extradimensional space (frequently referred to as a demiplane) attached to the divine realm (on the Outer Planes) of the god of the dead on Oinos, the first layer of the Gray Wastes of Hades. This divine realm is usually called the City of the Dead, although it was instead called the City of Strife under Cyric's command. Normally gods only have one divine realm; the Fugue Plane is an exception for the Chondathan god of death. The Fugue Plane has normal gravity, flowing time (one tenday on the Fugue Plane equals a day or less on Toril), an infinite size , a static structure, and is divinely morphic.  Its alignment trait changes depending upon which god is currently commanding it: under Myrkul and Cyric it is mildly evil-aligned; under Kelemvor it is mildly neutral-aligned. It has limited magic: the only spells that can be cast are by gods or their servitors, excepting planar travel magics like plane shift and gate. The plane did have a day/night cycle, although it had no visible celestial bodies.
Planar Geography As with many other things, the Fugue Plane's geography has shifted with the changing gods of the dead. At all times, the basic form of the plane has been an endless expanse of gray-white waste (hence its alternative spelling, the Fugue Plain). A single large gate leads from the Fugue Plane to the City of the Dead, set into the Wall of the Faithless.  The Wall of the Faithless itself is fifty feet high, made out of the bodies of the Faithless, stuck together with green mortar (like solidified mold) that slowly dissolves their souls. The crying of the Faithless can be heard for miles, and the stench of their rotting bodies is overpowering. 
When Kelemvor became god of the dead, he erected the City of Judgment, and extended the Wall of the Faithless to encircle it. The City is bleached-gray crystal, polished to a mirror sheen. The only colour are the dull topaz spires of Kelemvor's Halls of Judgment, where he and his avatars sit to judge the dead.
Planar Inhabitants The major inhabitant of the Fugue Plane is of course the endless throngs of the souls of the dead. Unjudged and unleavened, these souls are not yet petitioners nor other planar creatures; they frequently believe they are still alive or dreaming. The second largest group is the god of the dead and their servitors. Myrkul's servitors were undead; Cyric's servitors are undead and yugoloths; and Kelemvor's servitors are marut inevitables. The next largest groups are demons and devils (see below). The final group are the servants of deities come to collect their faithful.
Judgment The actual process of judgment seems to differ from deity to deity. Under Myrkul, his servitors would merely cull those they believed to be False or Faithless, and send the rest to their gods. Cyric let the servitors of other gods come directly to the Fugue Plane and retrieve their worshipers. The remaining souls were sent to Cyric's City of Strife, and determined to be False or Faithless there. Under Kelemvor, the remaining souls were instead judged in his Halls of Judgment, and then either returned to their gods, found False, or found Faithless. This process took a very long time, often tendays. There were additional fates for souls under all three deities: baatezu devils were allowed to negotiate with souls on the Fugue Plane, offering power and a new life in exchange for service and their soul (frequently as a larva or lemure); and tanar'ri demons raided the Fugue Plane from the Abyss, tearing Faithless from the Wall for their own hungers and uses. These efforts were approved by the god of the dead, enabling the fiends to refill their own ranks.
Planar Connections Portals or other permanent planar connections to and from Faerun are relatively common. For the souls of the dead, these portals are one-way, and are automatically sought out after death. The living may take these portals both ways, but they frequently come at terrible cost. One such portal, the Fountain of Nepenthe (in the fallen dwarven city of Kanaglym under Dragonspear Castle), would strip the memories from anyone travelling through it. On the Fugue Plane, these portals appear as shafts of white light in the cloudy sky.
The only other permanent way in or out of the Fugue Plane was through or over the Wall of the Faithless into the City of the Dead.
Frequently, demons and devils would open gates to the Abyss and the Nine Hells, respectively, to collect souls from the Fugue Plane. No colour pools exist offering travel to the Fugue Plane from the Astral Plane.
- Pathfinder Bestiary 2 208; 5e Dungeon Master's Guide 63 (larva), Mordenkainen's Tome of Foes 163 (nupperibo)
- Avatar Series Book 3: Waterdeep
- Avatar Series Book 3, Book 4, Book 5; Player's Guide to Faerun
- Avatar Series Book 4: Prince of Lies
- Avatar Series Book 5: Crucible: The Trial of Cyric the Mad
- These traits are taken directly from the Pathfinder GameMastery Guide 184-188 except for static structure, which is from Planar Adventures 60. 5e does not have a planar traits dictionary. Instead, in 5e terms: one tenday on the Fugue Plane is equivalent to approximately one day on Toril. The god who currently controls the Fugue Plane can change its features instantly with a thought, including its geography and other traits. Other creatures cannot change the Fugue Plane or its inhabitants without permission from the god of the dead. Spells cannot be cast on the Fugue Plane except by gods and their servitors, excluding magic that allows one to cross the planes such as plane shift and gate.
- Avatar Series Book 3, Forgotten Realms Atlas
- Pathfinder Book of the Damned 222 (as daemon); 5e Monster Manual 311
- Pathfinder Bestiary 2 166; Mordenkainen's Tome of Foes 213.
- The preferred servitors of Forgotten Realms deities are detailed in Faiths and Avatars, Powers and Pantheons, Demihuman Deities, or alternatively a limited selection may be found in this document: http://archive.wizards.com/default.asp?x=dnd/we/20020504a
- Player's Guide to Faerun