RE: The B/W Questions and Answers Thread
That sums it up nicely, but if you want a few more details, here you go:
The Masuda Method is a nickname given to a process that was hinted at by Junichi Masuda. Nothing more, nothing less. If you obtain a Pokemon that is from a different region, say, Canada if you're American, then you can greatly increase the chances of getting a shiny when breeding with a Pokemon that is from your country. The odds used to be something like 4 in 8192 in Gen 4, which can also be expressed as 1 in 2048. In Gen 5, the odds were increased to something like 6 in 8192, which can also be expressed as roughly 1 in 1366. All of this is all fine and good, and probably better if you have a Ditto from a different country, but there is a small catch. The Everstone method (that is, letting one of the parents hold an Everstone in order to pass down their nature) will not work. But if you're breeding for shinies, this probably won't matter anyway.
Theoretically, one could set their game to a country other than their own on Geonet, and then trade with one of their local friends to use the Masuda Method. I can't confirm this at all, though, because it's probably tied to the cartridge itself. But it's a theory.
Also, the Masuda Method is great when trying to abuse the RNG for shinies. You already have an almost certainty that will obtain a shiny, but it can be tedious at times. Since the Masuda Method reduces the amount of possibilities, the work is also reduced. I'm not sure if this applies to 5th Gen at this time though, with RNG research still being done.