The Ultra project was mainly involved with breaking the German Enigma codes. These codes were generated by an electro-mechanical device and widely thought to be unbreakable. The German Army, Navy, Nazi party, Gestapo, and diplomats all used Enigma machines, but there were several variants (eg, the Abwehr used a 4 rotor machine without a plugboard, and Naval Enigma used very encoded key settings, making it far more difficult to cryptanalyze than Army or Air Force Enigma). Each needed to be broken separately. There are several conflicting stories of how the Allies made the initial breaks into Engimas; especially for Naval Enigma physical seizure of crypto material was very significant. The most fundamental break into the Enigmas generally was made in Poland in 1932 by Marian Rejewski. See Enigma for some of the conflicting stories.
The group working on the breaking the code were an eclectic mix of crossword enthusiasts, mathematicians, and early computer scientists. The most noted participant was Alan Turing, one of the fathers of modern computing. The group worked at Bletchley Park in utter secrecy. By 1943 the incoming signals from the German war machine (more than 2,000 daily at the war's height) were routinely read, including some from Adolf Hitler himself. Such information enabled the Allies to build up an accurate picture of enemy plans and orders of battle, and when used sensibly were of great value in forming the basis of Allied strategic and tactical war plans.
The Allies were desperate to conceal from the Axis command that they had broken any of the Enigma traffic. This was taken to the extreme that, although they had intercepted and knew of the whereabouts of U-boats lying in wait in mid-Atlantic, they were not generally hunted unless a 'cover story' could be arranged -- often a search plane was 'fortunate' to sight the U-boat, thus explaining a later attack on it.
Ultra was used to sink many of the supply ships travelling to North Africa, but every time it was used, it had to be arranged that alternate means of discovery were provided, so scout planes would often be sent on unnecessary and dangerous missions to ensure they were seen by the German military.
Usable Ultra intercepts of signals came too late to be of great help during the Battle of Britain. It was not until the construction of electromechanical bombes that useful and timely intelligence was gained. Interception of signals between Adolf Hitler and General Günther von Kluge led to the destruction of a large part of the German forces in Normandy in 1944 after the Allied landing. In the Pacific Theatre, the Japanese crypto machine called "Purple" was unrelated to the Engimas, but was used for the highest level Japanese diplomatic traffic. Some of that traffic was very useful elsewhere during the War, but it was also cracked by the U.S. Signal Intelligence Service. The Japanese are said to have obtained an Enigma machine as early as 1937, although whether they were given it by their German allies, or bought a commercial version which, except for the plugboard and the actual rotor wirings, was essentially the German Army /Air Force machine, is disputed.
For 29 years after the war the existence of Ultra remained an official British secret. The ban was not lifted until 1974, the year that a key participant on the distribution side of the Ultra project, Frederick William Winterbotham, published The Ultra Secret. Wintherbotham's book is very interesting, but is in error on many points. He worked on the operation to distribute Ultra to end consumers and, based on the evidence of his book, did not understand much about cryptography. Peter Calvocorressi's book is better written and more responsible besides. He was involved in Bletchley Park's intelligence analysis of decrypted traffic, working between the codebreakers and the distribution operation.
A fictional version of this story is told in the novel Enigma by Robert Harris, ISBN 0804115486, and is somewhat covered also fictionally in Neal Stevenson's Cryptnomicon. See also S. Budiansky's Battle of Wits for a responsible account including much recently declassified information about WWII cryptography.
Today the Enigma transcripts are still extremely valuable as they provide some of the best surviving accounts of the Nazi war effort.