What was the Montauk Project?

Ryan Murphy, the mad genius behind American Horror Story, is preparing a new drama for Fox called Montauk.  Set in the Long Island community of the same name, the story apparently revolves around a conspiracy theory centered on the US Government's Montauk Project.  So what exactly was (or is) the Montauk Project?

Montauk is located on the tip of the Southern Fork of Long Island and is home to multi-million dollar homes.  It is also the former home of Montauk Air Force Station, which is now Camp Hero State Park.  The project allegedly was done at the behest of the Department of Defense and attempted to develop psychological weapons.

This telling of the Montauk tale aired on WVVH-TV in 2007: