It's a term used most often by people who have no idea what it means. So, the Obama campaign has decided to create a helpful educational video that clearly illustrates "out of context":
So, now the Romney campaign knows how it feels when the opposition makes stuff up about you. The difference here, though, is that the Obama campaign, unlike Romney's, isn't pretending that their candidate actually meant any of the out-of-context things he said in the above video. There's another term for this. Let me see if I can remember what it is. Oh yeah; it's also called "telling the truth."