This technique requires a third needle in the mix. If you don't have a third needle the same size as the one you used to knit your fabric, a size larger may be used, which will help keep your seam from being too tight and puckering the fabric. Or, you can use a smaller needle to hold the stitches from the first piece of knitting, so that your second needle is freed up to knit the second piece and do the joining. A more fiddly way is to place the live stitches onto a stitch holder, and then before doing the 3 needle bind off, slip them back to your second needle, then use a larger needle to bind off. Whichever way you feel most comfortable is the way you should do it.
You will get a nice, neat invisible seam on the right sides of your fabric using this technique - or, it can be used for decorative purposes on the right sides of the fabric.
For an invisible seam on the right sides of the fabric, you will want to make sure that the right sides are facing each other for the join.
To make the seam visible, make sure that the wrong sides of the fabric are facing each other for the join.
Make sure that you have an equal number of stitches on each needle to bind off, also.
Below is a picture of two pieces of garter fabric that have been joined using the 3 needle bind off
And here is a little sample of stockinette fabric that has been joined
I accidentally deleted the back side, showing the neat seam - you can get a look at it in the video though.
References used: Knitty Fall 2006 - Techniques with Theresa