Cutscene diving allows you to reach the bottom of a body of water, usually Lake Hylia, without using the Zora Armor. In an Any%, cutscene diving is especially useful for entering Lakebed Temple without the Zora Armor (click here for more information). Note that nowadays there are easier methods to enter Lakebed Temple which made Cutscene Diving obsolete.
Pull out an item or interact with something that has a cutscene. This most often involves either:
If you have positioned yourself properly with respect to the ledge, interacting with the item/person will cause Link to drop the object he was holding which will then push him off of the ledge he was standing on; essentially diving off of the item cutscene.
Though you cannot use the traditional item-push dive on the GameCube version, there is another way you can use an item to push you into a dive by interacting with a NPC's text.
Because of the perfect circumstances and environment you need to preform this trick, it is seldom used in a speedrun even though it is easier to do than rupee dive.
This method is much harder to do than the previous method(s) and is never used on the Wii version as an alternative to Midna Dive.
Perform the steps above to get a rupee near a body of water, instead of trying to get right on the edge simply start Jump Strike over the rupee. If you are doing it with a rupee coming to you from a boomerang you want to halfway charged when the rupee hits you, not fully charged. This works because Jump Strike delays the rupee cutscene until you land. Because Jump Strike is hidden skill number 6 its uses are limited but is used in 100% to skip the darknut fight in Hyrule Castle.