It also might be a good idea to have an official Association explanation of DCC as well as that of a Wiki. Here is Visa:

"What is dynamic currency conversion?
Dynamic Currency Conversion (DCC), also referred to as Cardholder Preferred Currency (CPC), is a service offered by merchants – not Visa - in some countries when you are traveling abroad. If you choose to use the DCC service, the merchant will convert the purchase price of goods or services at the point of sale from the currency in which the price (i.e., the merchant's local currency) is displayed into another currency (i.e. your home currency) using an exchange rate that typically includes a service fee.

Here's an example of a DCC transaction:
A U.S. Visa cardholder is in Singapore and decides to purchase a box of chocolates priced at SGD 20. At checkout, the merchant offers the cardholder the option to pay in USD using a DCC service.

The merchant dynamically converts the SGD transaction amount to USD 15.80. The DCC transaction amount and transaction currency (in USD) are disclosed to the cardholder. An exchange rate of 0.79 (1 SGD = .79 USD), which includes a 2.5% mark up (over a wholesale exchange rate) and the 2.5% commission/fee/mark up are also disclosed to the cardholder.

The cardholder actively chooses DCC by checking a box on a printed receipt or pushing a button on an electronic screen and agrees to pay USD 15.80 for the box of chocolates using the exchange rate provided by the merchant that includes a 2.5% fee for the DCC service.

If you do not want to use DCC when making a purchase, then you have the right to refuse the offer and have your transaction billed in the merchant's local currency, which will then use Visa's conversion rate. If you did not agree to DCC, but see it on your bill, then you should ask your issuing bank to contest the charge."
http://usa.visa.com/personal/card-be...-rates-faq.jsp

Another crucial point left out of the Visa explanation and not clarified in the Wikipedia, although stated, is that DCC will NOT GIVE YOU THE PRICE YOU WILL BE CHARGED if your card issuer imposes a foreign transaction fee, because that fee will still be imposed with or without DCC. BEWARE!

Finally, if you encounter non-disclosed DCC, which can happen especially at some ATM locations, you can successfully protest with your card issuer. Such protests sometimes work and sometimes do not. In some locations, especially in China, merchants staff often do not know how to reject DCC. Some people, including me, have been successful in negotiating an additional discount adequate to cover the FX excess cost. That only works well if you've internet access and can calculate the typical prevailing rate using Oanda or some other. I have done that numerous times in various parts of China.