In battle
All moves used by or against a Pokémon with this Ability cannot miss. It also allows Pokémon to be hit during the semi-invulnerable turn of Fly, Bounce, Dive, Dig, Shadow Force, and Sky Drop.
In Diamond and Pearl, a Pokémon with No Guard can successfully hit an opponent's Pokémon that has used Protect or Detect, but only if the attacker uses a move with less than 100% accuracy; the lower the initial accuracy of the move is, the higher the chance of the move breaking through Protect/Detect. Thus, when used against Protect or Detect, moves like Swift and Aerial Ace will always be blocked. OHKO moves are exempted from this behavior; they will always miss. This was a bug, and was fixed in Platinum.
In a Double Battle or a Triple Battle, the effect only applies to the Pokémon with No Guard and any Pokémon targeting it.
Outside of battle
Outside of battle, if a Pokémon with No Guard is leading the party, then No Guard increases the wild Pokémon encounter rate.