http://www.snopes.com/fraud/atm/atmcamera.asp
Basically, thieves modify the existing ATM equipment with their own equipment to snatch your PIN and card numbers.
A “skimmer” is placed over the existing ATM card slot and when you insert your card, the information is transmitted to the thieves who are possibly sitting in a car nearby.
Additionally, a wireless camera is mounted inside the brochure holder and positioned to record your PIN number when you enter it. So take a second look when you’re at the ATM next time, does anything look suspicious?