The original game has many names; we called it telephone in school. You sit in a circle and one person starts a story, the next person repeats and then adds onto to the story. When you end up with at the end is a very different story. Meant to be a lesson about how rumors spread, it can also be hilarious given the right participants.
The Appside brings us info about an iOS app that lets you participate in something similar with your friends. It's a great idea; I can't wait to try it out.