This is surprisingly effective when done well, it can really look like your leg has dissapeared! Unfortunately it's very angle sensetive, it only really works when viewed from the front.
Incase you can't work it out from the video, here's how you do it.
Hold the hat by the brim, with the opening resting against the top of your thigh, move it down until it covers your foot and hides it from view. As you raise the hat again, bend your leg at the knee. Et voila! Your leg has vanished!
Lower the hat again, straightening your leg as you do so. Ooh look! Your leg has re-appeared!
Top tips: Only raise the hat as far as your knee, and keep your foot hidden behind your thigh. A few minutes practice infront of a mirror and you'll soon get the hang of it.
Bonus points: Make both legs dissapear, at the same time...