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 moves such as Fly, Dive, or Dig.
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, the effect only applies to the Pokémon with No Guard and any Pokémon targeting it.
Outside of battle
Outside of battle, if the Pokémon with No Guard is leading the party, then No Guard increases the wild Pokémon encounter rate.