The Litotes reference article from the English Wikipedia on 24-Jul-2004
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Litotes

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In Rhetoric, Litotes is a figure of speech in which the speaker emphasizes the magnitude of a statement by denying its opposite. It is a form of understatement.

As with many figures of speech, the correct interpretation of litotes depends very much on the cultural setting.

Examples:

He was not unfamiliar with the works of Dickens.

'... no ordinary city.' Acts 21:39 (NIV)

The food wasn't bad.

A litotes essentially says "not X but not necessarily Y".

In colloquial speech, some people may say 'not NOT good' to mean 'not bad' ('not necessarily bad or good'). Esperanto, for example, possibly uses this construction for litotes: malmalbona, literally 'notnotbad'.

See also: double negative