We have been overwhelmed with requests for the secret behind this effect, as performed by Criss Angel, and are pleased to be able to reveal it here for the enlightenment of all.
The magician borrows a bottle of water and a cell phone. With a magical gesture, the magician pushes the two items together and -- kazam! -- the cell phone is now inside the water bottle! The magician then cuts open the bottle with a pocket knife, returns the damp, nonfunctional phone to its owner, and promises to take the water out of the bottle first next time.
The secret behind this trick is a simple gimmick hidden within the magician's hand. This clever (but incredibly small) device can be surreptitiously inserted into the neck of a plastic bottle and will, when activated, briefly spread its metal arms to stretch the bottle's opening until it is as wide as the rest of the bottle. Because the stretching lasts only a moment, the bottle's plastic snaps back into its original shape when released, but there is more than enough time for the magician to toss the cell phone through the opening, creating an impossible mystery for onlookers.
For magicians with large hands, a “jumbo” version is also available that makes it possible to insert a pay phone into a five-gallon Sparklets water bottle.