Wind Waker Diving allows you to plummet downward by activating a cutscene just as you are about to fall. This can be done with any item that has a cutscene, but the Wind Waker is preferred, as the duration of the dive can be controlled. This can be used to "dive" underwater and swim beneath islands, but is more commonly used for storage. It can also be used to dive into the void without being warped to the start of the room.
There are two common methods of Wind Waker Diving, one in which Link simply walks off of an edge, and one in which Link must be forced off an edge after climbing up one.
The first method involves going to the edge of any cliff or ledge that has a slope that Link would fall off of if touched. Walk towards the slope of the cliff or ledge and just before Link falls off, use the wind waker. Link should fall off the ledge with the Wind Waker out into whatever lies beneath. If he doesn't, walk a bit further towards the edge and pull out the Wind Waker again.
The second method involves taking out the Wind Waker, climbing a ledge, and activating the Wind Waker on a certain frame of Link's climbing animation. If performed correctly, Link will fall to whatever lies beneath with the Wind Waker out. This method does not work on every ledge, however; only if something that obstructs the camera's positioning is close to Link's face after climbing will this method work as it will force Link to face the opposite direction. The "something" is most usually part of the level geometry, such as the walls, though the large trees on the overworld can be used as well. Canceling the Wind Waker Dive three frames before landing on the ground will cause storage; this method is called "Dry Storage" as Forest Water is not required.
There exists another method to Wind Waker Dive; it involves the usage of an object to Wind Waker Dive. If a pot, bomb, or anything similar is placed on the edge of a platform, Link can walk toward it and the edge at and angle to perform a Wind Waker Dive. The object will force Link off in a fashion similar to the first method. This method is difficult to pull off in real time, as the requirements are rather picky, and the execution is quite precise. It is not commonly used because of this.
Wind Waker diving with 0 hearts allows you to immediately zombie hover after diving off of the ledge. To do this, stand on a surface with a drop-off so that the drop-off is on either your right or left. Make sure that your health has been lowered to 1/4 heart and place a bomb. Backoff from the bomb about the distance of the bomb's knockback range and place another bomb--either slightly to the left or slightly to the right depending on which side the drop-off is--. Walk forward behind the original bomb and wait for it to explode. You should be knocked-back just behind the other bomb. As you begin to stand up, mash the button the Wind Waker is on and you should dive off the ledge.