In a nut-shell, the Clip-Drop technique is simply what it says. You clip a bolt, climb up a bit and fall. You clip the next bolt, climb up a bit and fall again. The idea is that if you do this all the way up a route, you will become accustomed to falling and will be able to get past the fear of it.
The following video from Steep Media and UKclimbing.com illustrates the use of this technique in a climbing gym.
Fear of Falling - clip-drop technique from SteepMedia on Vimeo.
--Jason D. Martin