Oil spills are caused when an oil tanker in the ocean starts leaking oil, or when the drill that they use to get the oil breaks (this is what happened in the BP oil spill of 2010).
Oil spills can have a variety of effects on marine wildlife. One of the most common ones is oil sticking to furry animals (birds and seal pups), which makes it harder for them to escape predators and can cause hypothermia because the oil prevents their insulation from working. Oil spills also cause problems in marine animals' eating habits: either they eat food coated in oil which can cause internal bleeding and organ and immune system failures, or they will refuse to eat and end up starving. See more effects on wildlife.
There are also huge effects on the plant life in the ocean. Watch a video on the 2010 BP oil spill's effects on deep water coral and other wildlife.
See a slideshow of NASA's pictures of the BP oil spill.
List of the 10 biggest oil spills (as of October 2011).