Chameleon Arch

The Chameleon Arch was Time Lord technology which could modify the biology of one species, so the cells registered as another species. In essence, it allowed the user to change their species. The Chameleon Arch was composed of a headset, a fob watch-like device used to store the Time Lord's memories and original biological information, and a perception filter. (TV: Human Nature / The Family of Blood)

According to the Tenth Doctor, when Martha asked if the transformation into a human would be painful, he simply responded "Oh yeah; it hurts", implying any change in species caused a great deal of pain.

Function
Some traits of the user's true Time Lord self still remained after the use of the Chameleon Arch. For example, John Smith was able to use a simple cricket ball to deliberately cause a complex chain of events to save a mother and her baby from being crushed by a falling piano. Smith also kept a dream journal in which he chronicled memories of the Doctor's adventures. (TV: Human Nature/The Family of Blood) Professor Yana heard drums beating in his head all his life, a burden the Master also faced. (TV: Utopia/The Sound of Drums/Last of the Time Lords)

Notable uses
There was an account suggesting the Seventh Doctor, prior to his regeneration into his eighth incarnation, made use of a broken Arch to create the fiction that he was half-Human to use against the Master. (COMIC: The Forgotten, TV: Doctor Who)

The Tenth Doctor used a Chameleon Arch to change himself into the human John Smith to elude the Family of Blood. (TV: Human Nature/The Family of Blood) The Master also used the Arch to turn into a human to escape the Last Great Time War. He remained in human form until he opened the watch and remembered who he was. (TV: Utopia)

The Tenth Doctor used his Chameleon Arch to recover his memories, after his mind was taken over by Es'Cartrss of the Tactire. (COMIC: The Forgotten)

The Tenth Doctor also briefly considered that Jackson Lake might be a future incarnation of himself under the influence of an Arch. Lake had what turned out to be just an ordinary fob watch. The initials on the back of the fob watch revealed his true identity to both himself and to the Doctor. (TV: The Next Doctor)

Known Chameleon Arches
After the destruction of Gallifrey, there were only two known Chameleon Arches in the universe. One belonged to the Doctor inside his TARDIS, though he gave the fobwatch to Timothy Latimer. He seems to have either recovered it or had duplicates, in light of its later appearance in the Eleventh Doctor's drawing room. (GAME: TARDIS). The other was in the possession of The Master before he left the end of the universe to the 21st century. (TV: Human Nature, Utopia)

Behind the scenes

 * Although only shown to remove all memories from the Doctor and the Master, the Doctor believes Jackson Lake to have put his memories into a fob watch in The Next Doctor. As the Doctor knew that Lake was still able to remember that he was "the Doctor", it implies that specific memories can also be put inside them, as well as all of them.
 * Interestingly, among the Doctor's objects examined by Chang Lee in the Doctor Who TV movie was a fob watch that appeared very similar to the ones used by the Doctor and the Master to become Time Lords again.