This article is from the PGP FAQ, by Jeff Licquia email@example.com with numerous contributions by others.
The one time pad is the ONLY encryption scheme that can be proven to
be absolutely unbreakable! It is used extensively by spies because it
doesn't require any hardware to implement and because of its absolute
security. This algorithm requires the generation of many sets of
matching encryption keys pads. Each pad consists of a number of random
key characters. These key characters are chosen completely at random
using some truly random process. They are NOT generated by any kind of
cryptographic key generator. Each party involved receives matching
sets of pads. Each key character in the pad is used to encrypt one and
only one plain text character, then the key character is never used
again. Any violation of these conditions negates the perfect security
available in the one time pad.
So why don't we use the one time pad all the time? The answer is that
the number of random key pads that need to be generated must be at
least equal to the volume of plain text messages to be encrypted, and
the fact that these key pads must somehow be exchanged ahead of time.
This becomes totally impractical in modern high speed communications
Among the more famous of the communications links using a one time pad
scheme is the Washington to Moscow hot line.