Cold fusion is a general name given to nuclear fusion that occurs at comparatively low temperatures.  That is fusion not requiring millions of degrees.

Cold fusion has been known about for many years, but there is more than one type.

Muon Catalysed Fusion

Muons are elementary particles with about 207 times as much mass as an electron.  There are positive, neutral and negative muons.  A negative Muon can take the place of an electron in an atom.   When a Deuterium atom has a Muon instead of an electron, their average diameter is much less and the nuclei of two atoms can get close enough to fuse together.  After catalysing one fusion reaction the Muon can go on to catalyse more fusion reactions.

This was theorized about in 1947 by F. C. Frank.  It has been demonstrated many times experimentally.  However, there are problems.  A Muon can be made in an accelerator, but the energy needed is over 100 times the energy released by one fusion.  Another problem is that Muons decay in a short time.  Their average life is only about a 500,000^th of a second.  A second problem is that sometimes the Muon is lost to the system by becoming attached to a Helium Nucleus.

So far, this type of fusion cannot produce usable power, but some experimenters are still working on it.

Palladium Assisted Cold Fusion

Some metals have an affinity for Hydrogen which is not fully understood.  Palladium is one of these.  It can absorb Hydrogen or Deuterium so that a piece of this metal can contain as many Deuterium atoms as Palladium atoms.  This can be assisted electrically, making the Palladium an electrode in an electrolysis cell.

If that is done, the Deuterium atoms are quite close together in the metal.  But they are no closer than they get in chemical compounds.  Accepted theories suggest that fusion should not occur in the palladium.

In the 1920, J Tandberg of Sweden and, separately, F. Paneth and K. Peters, of Germany observed the apparent fusion of Hydrogen to Helium using Palladium.  These were later generally accepted as mistakes.

In 1989, Dr. Stanley Pons and Dr. Martin Fleischmann at the University of Utah observed the production of amounts of heat far higher than they could explain by chemical means.

Attempts by other people to replicate their experiments were not very successful.  There was a suspicion that the experimenters, who were trying to patent their discovery, had not released all experimental conditions.

An important part of the scientific process is that results need to be repeatable.  If not all the relevant information is released then this is difficult to do.

At this point most scientists decided that the results were spurious.  This view was particularly easy to take because the results seemed to contradict accepted theories.

The idea of chemical processes influencing nuclear ones is something of an anathema to Physicists.  However, anathema is a religious thing and should have no place in science.

Since then many scientists have continued research on cold fusion along the same lines as Pons and Fleischmann.  Some are now getting repeatable results.  They have been hampered by the reluctance of the established scientific journals to publish anything about cold fusion.

Another problem is that some sources, although they are saying things about cold fusion, the same sources are also talking about things like Astral Projection and spirit guides, so they create a suspicion that cold fusion is no more real than the other things they publish.

My Opinion

I must admit to being still sceptical about the actual cold fusion claims, but I definitely think investigations need to continue.  In particular there is heat production in many of the experiments being performed as well as Helium production in some of them.

If Helium is actually being produced, this almost has to be accepted as evidence of Fusion.  Unfortunately I have not seen a breakdown if which Helium isotopes were produced, and in what ratio.

I think that there is not yet a good explanation of the phenomena being observed.  To me that is an excellent reason for continuing the research.  We may find out things that we do not expect.  These things may be extremely important.

Sources

http://www.unexplainable.net/artman/publish/article_627.shtml

http://en.wikibooks.org/wiki/FHSST_Physics/Atomic_Nucleus/Nuclear_Fusion

http://www.newenergytimes.com/v2/government/DOE1989/sec1.htm