Kinetic simulations are used to investigate the interaction of an ultra-intense, small spot-size laser beam with a preformed plasma. The beam is sufficiently intense to drive the electrons relativistically and to impart a pressure in excess of hundreds of Mbars to the plasma. Key features of the interaction include generation of electrons and inward-directed ions with energies in the Mev range and strong hole boring which enhances the absorption. The simulations also show self-generated magnetic fields of order 108 Gauss, a Rayleigh-Taylor like instability of the light-plasma interface, as well as self-focusing of the laser beam and strong Raman backscatter.