Legend says 420 came about as it was the time (4:20pm) that college students in california would meet up to smoke after their day of studies back in the sixties/seventies.
Its been adopted by cannabis culture and used for a number of reasons. For example, someone who's looking for room mates who at least tolerate weed may say something along the lines of 'must be 420 friendly' in their ad. Go to any big park in a major city on the 20th of April 4/20 in US date format and you will likely come across a large gathering of stoners practicing their craft in celebration. This year we get to celebrate for the whole month of April (0)4/20(20) - Happy toking!