Hmm I don't watch South Park and have studied Mormanism and the hat thing always comes up.

http://irr.org/mit/divination.html

The "faithful" respondent's answers here are sadly uninformed and clearly based on inaccurate, spin-doctored Ward Hall training rather than scholarly sources. Simply put: It's wrong. It is well documented that Joseph Smith used seer stones (he owned several) and a hat in the "translation" of the Book of Mormon. And to prove this one need only refer to Mormon Friendly and official sources. The most popular account of this is Richard Bushman's classic book, "Rough Stone Rolling". Another popular source is Grant Palmer's Award Winning Book, "An Insider's View of Mormon Origins". Further if you do a search on the Church's Official Website (www.lds.org) you will find this addressed in a number of Ensign articles as well as other official church sources - including some of the CES training curriculum on Church History. You must dig and read but they ARE there - buried underneath the spin-doctored, white washed "faithful" (but less than totally honest) history that CES is so well known for! However, the quickest way to get up to speed on this is via the Internet. For example, I have compiled a list of validating references using only Mormon Friendly sources here: http://www.concernedchristians.com/index.php?option=com_fireboard&Itemid=42&func=view&id=73901&catid=520#73901 that also includes photographs of the two best known Joseph Smith seer stones. Finally, if you're willing to wander outside of official and Mormon friendly sources Mormon Studies Scholar, Bill McKeever has done a superb video on the topic which can be viewed here via this portal page: http://www.concernedchristians.com/index.php?option=com_fireboard&Itemid=42&func=view&catid=520&id=74081#74081 Please note that the references that I have provided here ALSO answer the, "How did it work?" question as too. And if you need additional resources and references on this question or other Mormon History questions please feel free to contact me via email. I am a Mormon Studies Scholar specialized in Mormon History and Culture. LEFT IMAGE: Photograph of Joseph Smith's "Peyote Seer Stone". It's about the size of a quarter but has been carved and shaped like a sliced piece of Peyote Cactus fruit. You can read more about the Peyote Seer Stone via this link http://www.mormonelixirs.org/index.php. (note: this article on the Peyote Seer Stone was well researched and well written but some Latter Day Saints may find it disturbing) RIGHT IMAGE: SEER STONE OF JOSEPH SMITH, handed down through private hands to the present day (1991). Apparently acquired by Joseph Smith in the 1820s before translating the Book of Mormon in Susquehanna County, Pennsylvania. Greyish-ivory-colored stone of irregular oval shape, approximately 5 cm. in length by 4 cm. thick. Marked with small irregular dark grey indentations and green deposits. With a large hole extending through the stone, terminating in three small apertures created by embedded stone particles. The apertures function like primitive lenses when held close to the eye. THE FAMOUS BELCHER-SMITH-DIBBLE-PIERCE STONE, said originally to have been found at Salina, New York, taken to Susquehanna County, Pennsylvania, and there purchased from the owner by Joseph Smith before he translated the Book of Mormon. Near the time of the martyrdom, this stone was acquired by a survivor of the Missouri mobs, Philo Dibble, who also made the death masks of Joseph and Hyrum. Dibble later exhibited the stone, death masks and other historical objects on lecture tours which he conducted in Utah Territory. Early Mormon seer stones are of the greatest rarity and importance. The lure and lore of "magic stones" have of course fascinated people throughout history. According to Brigham Young, Joseph Smith had three seer stones during the early part of his life. Judging from numerous other accounts, these would have been the white, opaque stone, of which nothing has been heard since 1900, the present "green" stone now offered here, and the brown stone which, according to David Whitmer and other friends of the Prophet, was used to translate much of the Book of Mormon and which is kept in the First Presidency's vault in Salt Lake City. Modern studies based on writings by faithful early members of the Church suggest that Joseph Smith took his seer stones very seriously, and sometimes used them to receive revelations. For documentation and analysis of the above, see Quinn (below, citing statements by Brigham Young and others in the Church Archives), and David Whitmer, An Address to All Believers in Christ . . . (Richmond, Missouri, 1887), p.12. (Link To Source = http://www.rickgrunder.com/HistoricalArchive/belchersmithdibble.htm)

Joseph Smith at first used some instruments dalled Urim and Thummim, while Martin Harris scribed for him. Until Martin lost the first 116 pages they translated. Then after the Angel took the Plates and the Urim and Thummim away for a time. (several mionths) Then Moroni returned the Plates, but did not return the Urim and Thummim. So after a new scribe named Oliver Cowdery arrived, he and Joseph began translating again. This time with a Seer Stone which Joseph buried in a hat then placed his face in the hat and pulled the brim up around his face to block out the light. Joseph did not tell us exactly what took place inside the hat. So any explanations offered by others as to how this was done, is only speculation on their part. No one knows what took place inside that hat. But Joseph and Oliver translated our present Book of Mormon in just about 63 days. whew4

Maybe he was stoned, LOL!

“Joseph Smith would put the seer stone into a hat, and put his face in the hat, drawing it closely around his face to exclude the light; and in the darkness the spiritual light would shine. A piece of something resembling parchment would appear, and on that appeared the writing. One character at a time would appear, and under it was the interpretation in English. Brother Joseph would read off the English to Oliver Cowdery, who was his principal scribe, and when it was written down and repeated to Brother Joseph to see if it was correct, then it would disappear, and another character with the interpretation would appear. Thus the Book of Mormon was translated by the gift and power of God, and not by any power of man.” (David Whitmer, An Address to All Believers in Christ, Richmond, Mo.: n.p., 1887, p. 12.) source: http://www.lds.org/ldsorg/v/index.jsp?hideNav=1&locale=0&sourceId=05169209df38b010VgnVCM1000004d82620a____&vgnextoid=2354fccf2b7db010VgnVCM1000004d82620aRCRD