A pinhole camera is a small, light-tight can or box with a black interior and a tiny hole in the center of one end.

A pinhole camera is a simple camera without a lens and with a single small aperture.
It is effectively a light proof box with a small hole in one side.  Light from a scene passes through this single point and projects an inverted image on the opposite side of the box.  The human eye in bright light acts similarly, as do cameras using small apertures.

The Camera Obscura:

Lets go back in time, a few hundred years infact.  It was discovered that light travels in straight lines, and it was also discovered that if you put a small hole in the wall of a darkened room an image of the outside would be projected on to the wall opposite the hole.

Painters used this technique to project images onto canvases
which they then traced resulting in images with great accuracy
and perfect representation.

Pin hole photography is fairly simple to explain.
Its like any other photography but instead of using a lens, a very small hole is used to project the image onto the film or other light sensitive materials.

Make your own Pinhole Lens:

There are a multitude of sites with detailed instructions as to how to DIY a pinhole lens on the internet.  Basically you drill a hole in the centre of a lens cap.  Get a piece of aluminium and make a pinhole in the centre, place the piece of aluminium over the hole in the lens cap making sure the pinhole is exactly in the centre and glue down.

You can have fun trying to make your own pinhole or be lazy like me a buy a ready made one on the internet.  Mine cost about $15.

Here are some images I took with my Pinhole Lens.