Nuclear Fusion:
a nuclear reaction in which nuclei combine to form more massive nuclei with the simultaneous release of energy
Under terrestrial conditions it is the two hydrogen isotopes, deuterium and tritium that are easiest to fuse, producing in the process a helium nucleus, a neutron together with large quantities of energy. Since deuterium is obtained from sea water and tritium is derived from lithium (which is also fairly common) the fuels for generating nuclear fusion are relatively cheap, hence in theory the process holds out the prospect of generating bountiful quantities of relatively cheap energy.
The problem has always been how to get fusion to work in practice. Various methods have been tried to date with limited degrees of success including manipulating plasmas using intense magnetic fields as in a tokamak an example of a magnetized target fusion driver or by laser fusion that is firing laser beams at a suitable target, technically an inertial confinement driver.
At the Sandia National Laboratory in New Mexico they have rejected both these methods and built what they call the Z machine, which is currently the world's largest example of what is known as a Z-Pinch Driver
So what's a Z machine?
The Z machine is essentially a prototype nuclear fusion generator.
The Z machine is a circular device about 120 feet in diameter and consists of a series of capacitor banks that store an electrical charge which is then discharged through a series of water insulated metal cables in order to generate and enormous but carefuly timed electro-magnetic pulse directed at a central vacuum chamber.
Within the chamber there is a small container known as a hohlraum, which is a foam cylinder containing several hundred nearly invisible tungsten wires. These tungsten wires are crushed by the magnetic field generated and as they collapse they generate a lot of heat and oodles of X-rays which compress a small deuterium capsule within the container causing the atoms of deuterium therein to fuse and thereby produce neutrons.
Incidentally it is called the Z machine because the electrical current passing directly into the target travels vertically, which by convention has always been known as the z axis.
Does it Work?
Up to a point; the official word is that they can now fire the beast up and are satisified that they can produce genuine fusion.
What they haven't managed to achieve is ignition, that is the point at which a fusion reaction becomes self-sustaining. At the moment they have to use quantity x of standard electricity from the grid to fire up the Z machine in order to produce fusion and generate a quantity of electricity somewhat less than x.
They are also some way away from the holy grail of fusion research which is known as high-yield fusion, that is the point at which the energy produced by the fusion reaction exceeds the amount of energy used to create it.
What next?
The Z machine itself is only really a proof of concept, a test rig to demonstrate that fusion is itself achievable.
The next step is to get the funding to build the larger X-1 machine, which should be capable of producing x-ray temperatures of more than 3 million degrees Kelvin (which is not quite as hot as the Sun gets, but its getting there) which, it is believed should achieve the goal of attaining high-yield fusion and offer the prospect of virtually limitless electrical power.
Or it might even suit as a rocket propulsion system.
Or you might be able to build a fusion bomb.
Sandia is a multiprogram laboratory operated by Sandia Corporation, a Lockheed Martin Company, for the United States Department of Energy's National Nuclear Security Administration under contract DE-AC04-94AL85000. With main facilities in Albuquerque, New Mexico, and Livermore, California., Sandia has major research and development responsibilities in national security, energy and environmental technologies, and economic competitiveness.
Just so you know.
SOURCES
Definition of nuclear fusion from
http://define.ansme.com/words/n/nuclear_fusion.html
David Whitehouse Alternative fusion machine limbers up at
http://news.bbc.co.uk/1/hi/sci/tech/2928435.stm (8 April, 2003)
Sandia National Laboratory at http://www.sandia.gov
Dangerous Thermonuclear Quest - Statement of Hisham Zerriffi IEER Press Conference July 15, 1998, National Press Club at http://www.ieer.org/reports/fusion/hishstat.html
for a view on why the Sandia project could be illegal under Article I of the Comprehensive Nuclear Test-Ban Treaty | 
