I learned this technique from Maureen Mason-Jamieson's Shadow Boxes Cardigan pattern. The images here are mine and meant to help anyone who might want better visuals for this technique.


This is the starting position two needles bearing equal numbers of stitches. Everything is worked from right to left.

 
To perform the bind off stitch, first insert the third needle knitwise into the stitch on the front needle.
  Then, insert the working needle purlwise into the stitch on the back needle.

  Pull the back stitch off the needle.

  And through the stitch on the front needle. After doing several of these, you end up with something like this:

  Note that you don't need a working yarn strand. All the "binding off" is done with the loops on the two needles and you are left with stitches on the working needle, which you can continue working or bind of the normal way.