A spectator writes something secret (such as a chosen card, a loved one's name, or a confession) on a piece of paper, tears it up, puts it in an ashtray, and sets it on fire. The magician takes the ashes and wipes them on his arm, and the secret that was written on the paper appears written in ashes.
There are two parts to this trick: Finding out what was written on the piece of paper, and making the message appear.
Finding out what the spectator wrote is the hardest part. The secret to this is the magician's knowledge that paper that has been written on will not burn at the same speed as paper that is clean. If the magician pays close attention to the flaming paper, the message will easily be seen written in unburnt paper for a fraction of a second before combustion is complete. Because the paper was torn up, it will take a little mental gymnastics for the magician to reassemble the thing in the mind's eye, but it's not even half as impossible as it sounds.
The ash writing is simplicity itself. When the magician's fingers are covered in ash, a little verbal misdirection is used while the magician boldly writes message on forearm with fingertip. Nobody expects this, so nobody notices.