A telecine machine is used to transfer film to another format ie; DVD. It works by projecting the image from the film directly onto a CCD chip which can then be written to another format, sometimes called optical printing. These machines are usually expensive and rarely seen for older film formats like 8mm and 16mm
Movietovideo.com has made themselves a DIY version! Only drawback seems to be the fact that it's resolution is limited by the webcam its using to capture. Interesting project though
Check out these sites for more solutions!
Siltec.co.uk details their DIY telecine using a capture card and video camera
DIY Super 8 Telecine – A huge resource dealing with most things
Filmshooting.com – A really informative article detailing the different methods of telecine
Wikipedia Entry – As informative as ever
FSDT – This guy used an old flatbed scanner to transfer the film