Hm...since I wrote this, the other writeups that used to precede it seem to have gone missing. In the interim, Taliesin's Muse has written an excellent writeup on the bouncing bomb which explains much of the story - I'll just recap here.
The 'Dambusters Raid' is the name given to a long-planned special bombing mission carried out by 617 Squadron of the RAF's Bomber Command during World War II. Using specially developed barrel-shaped bombs that were spun up by motor to rotate backwards before being dropped from their racks, the planes attacked and destroyed several major strategic dams inside the German industrial region known as the Ruhr. Their losses were hideous, but the breaching of the dams heavily damaged not only the areas below the dams, but also drained a critical canal network used for barge freight and disrupted electrical power to the region.
The raid on the dams, as well as the special bombs used to carry it out, were both the brainchild of a British engineer (or boffin) named Barnes Wallis, who had come up with the idea several years before. He had pitched the idea to the authorities of Bomber Command for years. When the chance came, 617 Squadron was formed specifically to train for and execute the raid, under the command of Guy Gibson.
Ironically enough, the German authorities had for years ignored a flood of concerned letters and calls about the dams from a German engineer who had come up with much the same scheme for destroying them as Wallis. However, his campaign to put torpedo netting and air defenses on and around the dams came to naught, as German officials responded in much the same way British ones had initially, with dismissal.
After the raid, 617 squadron was used as a 'pinpoint' bombing force, carrying more of Wallis' inventions to bomb select important targets. He invented a six-ton weapon nicknamed Tallboy, which was designed to bury itself in the earth before detonating and destroy structures using shockwaves. The bomb fell so fast it had to be made to spin for stability as its velocity approached and exceeded Mach 1. A Lancaster could carry only one of these weapons due to its size and weight. Tallboy was used to attack U-Boat pens on the coast of France and Germany; these structures were essentially enclosed piers with massive concrete rooftops poured on top of them. Because the U-Boat was so low, they could be made quite squat and strong; regular 1000-pound bombs would detonate harmlessly atop them. The Tallboy struck both around the structures and on top; those that struck around it destroyed the foundations with shock, and some of those that struck the top at the chance correct angle actually penetrated the concrete and detonated inside the pens.
The final weapon in 617's arsenal was Wallis' long-time dream, a ten-ton bomb named Grand Slam. These could be carried by a Lancaster only if the bomb bay doors were removed, and when they took off, their wings could be seen visibly bending upwards at the tips as the weight of the bomb stressed the mainspar. Only a few of these were used, as it was introduced quite late in the war. 617 was scheduled to perform missions in the Pacific Theater after VE day, flying against targets in Japan but, before they could deploy, the much more efficient and lethal Fat Man and Little Boy weapons were dropped and the war ended.
Sources: Memory of The Dam Busters: The story of 617 Squadron by Paul Brickhill, as well as a History Channel special on the raid and an article on the Avro Lancaster in Flying! Magazine. I haven't seen the movie.