From BlenderWiki

[edit] Modelling with lattices

A Lattice consists of a non-renderable three-dimensional grid of vertices. Their main use is to give extra deformation to any child object they might have. These child objects can be Meshes, Surfaces and even Particles. Why would you use a Lattice to deform a mesh instead of deforming the mesh itself in EditMode? There are a couple of reasons for that:

• First of all: It's easier. Since your mesh could have a zillion vertices, scaling, grabbing and moving them could be a hard task. Instead, if you use a nice simple lattice your job is simplified to move a couple of vertices.
• It's nicer. The deformation you get looks a lot better!
• It's fast! You can put all or several of your child objects in a hidden layer and deform them all at once.
• It's a good practice. A lattice can be used to get different versions of a mesh with minimal extra work and consumption of resources. This leads to an optimal scene design, minimizing the amount of modelling job. A Lattice does not affect the texture coordinates of a Mesh Surface. Subtle changes to mesh objects are easily facilitated in this way, and do not change the mesh itself.

[edit] Subpages

1. Shape Following
2. Shaping a Fork