I checked the wiki, but not much detail on how one goes about reversing a transaction after its made.
News reports that mt.gox reversed all its transactions, how is this accomplished?
I thought bitcoins was send and receive only, not sure how you "cancel" a transaction after its sent out.
Couldnt this be used for fraud?
As already replied by xane, bitcoin transaction can't be reversed. That's "for my part" the major problem of bitcoin system. You need to entirely trust someone when you send him funds.
That's why escrow services exist such as ClearCoin, Eptiv and my new opened one BTCrow.
Of course you need to trust the Escrow service itself, but once you have good experience with one of them you don't have to trust other people for your transactions.
The limitation of the current Escrow Services are the lack of support for merchant carts etc. I'm working on it for mine to integrate merchant api for safe trading.