One of the issues that seems to arise with regularity is that people with an axe to grind against the Mormon church will take doctrines and practices out of context and without explanation. In isolation any religious practice tends to look a little kooky. Often though, with a little more information, things make a whole lot more sense, and even have an elegance to them.
With that said, I want to explain the practice from my view as a practicing member of The Church of Jesus Christ of Latter-Day Saints.
One of the more thorny topics in all of Christendom (and even all religion) is what happens to all those people who never even heard of Jesus Christ? If God is just, he cannot just damn them for being born in a dirty patch of some unknown country, yet without accepting Christ and the atonement one cannot return to live with God. Some are willing to allow them to be theologically damned, others leave it to faith that an answer will come about, but answers are not usually forthcoming.
What surprises most people are the biblical roots of proxy baptisms. From the King James version of the Bible we read:
-- 1 Corinthians 15:29
29 Else what shall they do which are baptized for the dead, if the dead rise not at all? why are they then baptized for the dead?If you want to see people make strange faces, show this to a minister. Please, look in your Bible. It's in there, and it isn't a mistranslation. For convenience, you can look at this link to see a wide swath of the translations available for this verse. They all say pretty much the same thing:
Biblestudytools.com Compare Translations for 1 Corinthians 15:29
This single scripture is illustrative of a whole lot of principles that the LDS Church believes, but we will focus on the baptism for the dead part.
As with many other Christian faiths, Mormons believe that baptism is essential to return to live with God, but that it must be performed in this life. Baptism by proxy fulfills this need, while still allowing the person to have their choice. If you want to know what goes on in Mormon temples, you now know one of the significant activities performed there. Not terribly mysterious is it?
In a font, usually in the basement of the temple, two people will enter. The baptizer will be a priesthood holder, and the proxy may be as young as 12. Males are baptized for males, females are baptized for females. The name of the person for whom the baptism is being performed is stated, noting they are dead, and using a prayer borrowing heavily from Matthew 28:19, the proxy is then immersed in the water completely. Often an individual will do this a half dozen or more times for different individuals, back-to-back.
A proxy baptism is NOT valid unless the person who has passed on accepts it on the other side. This is an important point to note. One who has been baptized via proxy is no more a Mormon than if we walked up to a stranger on the street and asked them to be baptized. I would imagine the reaction on the other side in many cases will be very similar to that scenario.
Without getting into a much larger discussion of the afterlife here, it is believed that just like there is a missionary work here (hasn't everyone seen the guys in suits on their bicycles?) there is also a missionary work on the other side to educate people of Christ and give them that opportunity.
With that in mind, it is important to note that when these ordinances are performed the people performing them don't approach it as "converting" those the work is being done for. It is an act of love and concern that gives that person an option they would not have otherwise had. It is a way to gift those who didn't get a chance that opportunity if they wish it. Nothing more. Nothing less.
Here are some articles worth noting from the Jewish community in relation to the baptisms:
Is Mormon proxy baptism of Anne Frank an outrage, progress or both?
Let the Mormons baptize Jews
I also think the following article is worthy of note for context:
Op-Ed: Recalling a Mormon senator who tried to save Anne Frank’s life
Regardless, on the part of those that perform this ordinance, it is seen as a gift. That can be accepted or rejected by the person in question, but in no way lessens who they are, or what they believe. While I can understand the offense some take, I believe it is based on not truly understanding what is going on. That said, the LDS Church has committed to not allow people from the holocaust to be posthumously baptized.
Those who have performed the baptisms in question have done so against the policies of the church, and will most probably receive some form of church discipline. You can see the LDS Church's statement on the matter here:
Church Statement on Violations of Proxy Baptism Policy
It is rare you will see such a strong statement from the LDS Church. I think the point has been well reiterated to the membership.
I hope this has helped you understand what is really going on with Mormons and baptism for the dead.