I've never even heard of that before. How does this work, or how do you do it?
It isn't used much as it hasn't been fully integrated into the client yet. It's only possible to do it from the API and even then it's complicated.
https://en.bitcoin.it/wiki/Original_Bitcoin_client/API_Calls_listHave a look at addmultisigaddress, createmultisig
I came across this site recently that supposedly makes it easier to do this:
http://www.bitescrow.org/Haven't tried it out yet though.
This is very useful
Many companies uses solutions like this but with other currencies to ensure there corporate funds isn't fiddled with. So if the company have 3 owners, 2 of them have to give their passwords to complete a transaktion