Ditto Full description

Ditto, The Transform Pokémon. 

It can reconstitute its entire cellular structure to change into what it sees, but it returns to normal when it relaxes.It has the ability to reconstitute its entire cellular structure to transform into whatever it sees. It can transform into anything. When it sleeps, it changes into a stone to avoid being attacked. Its transformation ability is perfect. However, if made to laugh, it can't maintain its disguise. Capable of copying an opponent's genetic code to instantly transform itself into a duplicate of the enemy.
Overview

"It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change. In the struggle for survival, the fittest win out at the expense of their rivals because they succeed in adapting themselves best to their environment." 
- Leon C. Megginson, commonly misquoted as Charles Darwin

The above quote is a very accurate description of Ditto. In the beginning Ditto was nothing more than a useless gimmick. It had bad stats (48 base EVERYTHING) and it was forced to withstand punishing firepower while it Transformed, and even then it was at best a damaged version of whatever it was facing. It could breed with all Pokemon so it was very useful there, but in combat it could do nothing. While eventually the items Quick Powder and Metal Powder would be created they did little to improve poor Ditto. The genetic transformer endured its status of useless yet bangable blob for 16 years. 16 LONG years. Rumors started a few years later. Stories of monstrous beings. Fantastic tales of Ditto who would appear from nowhere, immediately Transforming without wasting a turn, and then destroying everything in their path. In reality, Ditto had done what it does best. It adapted. Black and White 2 had given Ditto the absolute best gift it could receive, Imposter. In one bright shining moment Ditto jumped from low tier useless gimmick to top tier threat. Though Ditto has only 252 usable EVs (all stats besides HP copy the opponent), one viable item, and literally a single move in the right condition it is easily one of the most adaptable and devastating Pokemon in the game.
Abilities
Limber: The Pokémon cannot be under the PARALYZE condition while having this ability. While not technically a bad ability, it is many levels worse than Ditto's other ability.
Imposter: You Transform into the Pokémon in front of you instantly. Basically this means any moment where Ditto hasn't Transformed it does so automatically... without taking up a turn to do so. Imposter copies the opponent's stats (besides HP), stat boost, abilities, moves, etc. The only thing it doesn't copy is the held item.
Movesets
One set to rule them all.
- Transform
Item Attached: Choice Scarf
Ability: Imposter
EVs and Nature:
EVs: 252 HP
Serious Nature (Neutral)
Imposter effectively means that at any given moment you are a copy of the Pokemon you were facing when Ditto first entered the field. Besides your HP and held item Ditto becomes your opponent, including all its stat changes. This is where the Choice Scarf come into effect. Imposter will copy your opponent's stats but Choice Scarf guarantees you will be faster than them (unless they also run Scarf, in which case you speed tie). So imagine this situation. Your opponent's Dragonite has just Dragon Danced. Your counter has fainted. You send in Ditto. Your opponent chuckles softly. You grin. In a flash Ditto's ability activates and the blob becomes Dragonite. The two winged beasts stare each other down. While they are equals in combat the two are most certainly not an equal in speed. Though Ditto shares Dragonite's 600+ Attack it has about 50% more speed points than what it copied thanks to Choice Scarf. Your Ditto lets loose a cataclysmic Outrage before your opponent can retaliate. Ditto then goes on to sweep the opponent's team by turning their own sweeper against it. Now replace Dragonite with almost any other sweeper. Literally anything that tries to set up with Swords Dance, Nasty Plot, Shell Smash, Agility, Rock Polish, Work Up, Tail Glow, or Dragon Dance are cloned and turned on their creators. While Ditto can't as easily beat Calm Mind, Quiver Dance, or Bulk Up Pokemon it can still put some of them under pressure. Ditto is a total nightmare to offensive teams. Ditto can be the glue that holds less defensive teams together and in a pinch turn into a devastating sweeper. It isn't all Jurassic Park themed clone rampages for Ditto. Some teams don't run many, or any sweepers at all. Against these defensive or stall teams Ditto is far less useful. Ditto is so bad against these teams that you are effectively starting the game off 5-6. Luckily for Ditto stall teams are someone less common than heavy offense. Keep in mind when using Ditto that it can not switch in. If you switch in on a Dragonite as it Dragon Dances you will transform before it boosts. To get Ditto in safely you need to either use a slow Baton Pass / U-turn / Volt Switch Pokemon or just let something faint first. Though Ditto has the same or better in almost every stat, its pathetic HP does not change. Max HP EVs gives you 300 HP, effectively giving you as much HP as a defensively EVed Rotom Wash, or offensive Pokemon with base 80 HP.
Just to give you an idea of how much Ditto can revenge kill here is a list! The following Pokemon are annihilated by Ditto after they use a boosting move or simply if Ditto can cripple them even if they don't boost.
Alakazam, Breloom, Cloyster, Dragonite, Dugtrio, Espeon, Genesect, Gengar, Gyarados, Haxorus, Heatran, Hydreigon, Infernape, Keldeo, Landorus, Latios, Lucario, Magnezone, Mamoswine, Metagross, Salamence, Scizor, Starmie, Terrakion, Thundurus, Tornadus, Tyranitar, Venusaur, Virizion, and Volcarona sort of.
While on topic of... Ditto. Here are some facts about Transform you might not have known (and many you probably did).
- When you Transform into your opponent all your moves have just 5 PP. PP ups do not increase this limit.
- In Red / Blue / Yellow a Ditto vs Ditto battle would go on forever as neither could hurt each other and they would keep gaining 5 PP when they Transformed. This was fixed in Gold / Silver. Now when a Pokemon Transforms it enters a "Transformed state". When in this state the game makes any further uses of Transform fail. So if a Ditto Transforms into another Ditto it will get 5 Transform PP that it will wear out until it faints from Struggle.
- Despite what the Serebii page says, critical hits do not hit Ditto's original stats. When Ditto Transforms it becomes the opponent, no strings attached (besides not copying HP or the item).
- Any Pokemon with Illusion (basically just Zoroark and its pre-evolution) are immune to Imposter / Transform's copying effect. While this completely screws up Ditto it can help reveal "who is the Zoroark".
- Substitute also blocks Imposter / Transform. Transform can be Taunted, though Imposter can't (it's an ability).
- Though Ditto copies the stats ignoring its own non-HP IVs, it does not copy Hidden Power. What this means is you must pick your Hidden Power before the battle. It won't affect your stats but it's better than getting stuck with HP Dark. The best choices are Ice, Fire, and Rock as they hit the most Pokemon hard.
- Ditto can not copy items. This is obvious, but a less obvious side effect is that you can no longer safely counter Marowak. This is important!... not really.
Other Options
As Ditto only gets one attack and has only one stat that it can put EVs in. It literally doesn't have any other options. You can run Sassy with 252 EVs in Special Defense along with as few Speed IVs as you can. This will let you be slower than opposing Ditto so in the rare Ditto vs Ditto matchup, you will struggle yourself to death last. Special Defense might help survive a Zoroark hit if you mess up and take a random Dark Pulse. Also it might be worth mentioning that there is absolutely no item other than Choice Scarf that Ditto should hold. No other item boosts your Speed after you Transform, meaning you have at best a 50% chance of beating your opponent.
Double & Triple Battle Options
Not really any with Imposter. Transforming into a random opponent is cool for scouting but since you can't pick your target it isn't very reliable. Quick Powder Limber Ditto is almost better as with Fake Out or Follow Me support it might actually do something useful. Keep in mind though that Mew exists who can also Transform. 404 max HP is a LOT more than only 300.
Partners
Ditto is technically all Pokemon at once so its hard to nail down specific Pokemon that work well with it. As Ditto is basically a hard stop to most frail setup sweepers you can fill your team with powerful attackers like Latios, Terrakion, Lucario, Salamence, Hydreigon etc. Slow users of Volt Switch and U-turn can get Ditto in on something safely without the need for risky predictions or letting something faint beforehand. Forretress is a good example as it is slow, has Volt Switch, and can Rapid Spin away Toxic Spikes that slow Ditto down. Remember that while Ditto heralds the destruction of basically all offense it is completely useless against stall. Choice Specs Shadow Tag Gothitelle ravages stall by preventing them from switching, picking off stall members one by one. Hard hitters like Swords Dance Haxorus and mixed Salamence are also great at wearing down stall. As said before running Ditto + 5 random sweepers is usually a good enough strategy to win you at least some battles.
Countering Ditto
As Ditto transforms into your own Pokemon the only thing you need to do against it is play smart. You will know what moves it will run and most of the time it will be locked into one move. So don't be foolish and have your Terrakion Swords Dance when Ditto can copy it and sweep your team. Toxic Spikes will beat Ditto as even if it Transforms into a Steel / Poison / Levitating / Immunity Pokemon it will stay Poisoned. Ditto isn't really something you can prepare for as no matter what you do it can also do. Just try to play better than your opponent. I guess if you REALLY hate Ditto you can run Zoroark + 5 Pokemon with Substitute, That'l show the pink blob what's what. But seriously, Ditto is nothing you should worry about as long as you play carefully.

Locations in Games
Ruby/Sapphire/Emerald:
Desert Underpass (Emerald)
Trade from Emerald/FireRed/LeafGreen (Ruby/Sapphire) .
FireRed/LeafGreen:
Routes 13, 14 & 15, Cerulean Cave Floors 1, 2 & Basement 1, Pokémon Mansion Basement 1
Colosseum/XD:
Trade from Emerald/FireRed/LeafGreen
Diamond/Pearl/Platinum:
Route 218 (Diamond/Pearl)
Trophy Garden (Platinum).
HeartGold/SoulSilver:
Route 35, Route 47, Cerulean Cave, Safari Zone
Black/White:
Giant Chasm
Black 2/White 2:
Giant Chasm