Why did Luther say "Sin boldy"?

I've heard it reported that Martin Luther told his parishioners to "sin boldly". I'm not sure if this is based in fact and his writings or something that is made up by Catholics to paint him badly. If he *did* say this, what's the original source/context, and how is it explained? Is he claiming that sin has no *ultimate* consequences? Is he claiming that sin has no consequences whatsoever? Is he claiming that it's "ok" to sin? Please help me to exegete Luther's statement.