"Functional Training" is a term that you see thrown around a lot, but rarely defined. The term has often been attacked because it brings up images of wobble boards and Swiss balls. While these devices can play a part in functional training, they are not the whole picture. They do not emulate real world conditions, so they should only occupy one compartment of a functional training regimen if at all. A lot of other people have said that functional training depends entirely upon what your goal is. Well, if your goal is highly specific like being a powerlifter, then you have a clear function to train. However, your body has a wide variety of functions other than lifting a barbell in three ways. If you are like 99% of the people out there that just want to be healthy or well-rounded, shouldn't you train for a wider variety of functions?
To me, there is a huge difference between funtional training and training for a specific function. What happens when you tell a marahoner to try and do something unrelated to his sport, like wrestling? He gets body slammed in three seconds, because he never has enough time to express his incredible endurance! In the real world, nothing is as simple as it is in marathon running. You must face a much wider array of challenges than just running endlessly. Sometimes you have to lift something heavy, or move quickly, or be flexible. The real world does not test you one attribute at a time. When you go to lift the TV, you don't lift it all the way up just to set it right back down. Chances are you have to carry it up the stairs, which requires strength, endurance and balance in a total body effort.
Thus for me, functional training is a methodology that hits all the major muscle groups with realistic compound movements. It should develop all of the major fitness attributes: strength, flexibility, speed, power, agility, anaerobic and cardio endurance, balance and a wide variety of motor skills. I think variety is extremely important and people have found different ways introducing it into their training programs successfully. For example, the CrossFit method is to take a large group of movements and combines them in every possible pattern. Another method is to cycle through a variety of training methodologies so that the training effect accumulates and an end goal is reached. This is sometimes called the conjugate method. Both methods have been shown to be successful, despite their differences.
My own personal method is to use sort of a 70-30 rule. 70% of your training volume should go to 30% of your exercises. Then a smaller volume of 30% goes to the variety of your exercises, the other 70%. I think this type of program has sufficient focus for adaptation and sufficient variety for versatility. After selecting your core and auxiliary exercises, the real fun comes when you start to combine them into workouts. Interesting results can be achieved through complex training, where one exercise enhances your efforts in the next exercise. For example, combining heavy cleans and box jumps is fun, because the cleans wire you up for more powerful jumping. The last time I did this, I was surprised to find that my box jumps became easier and more powerful throughout the workout, despite the onset of some fatigue. Of course, you can also form negative complexes, like running and deadlifts. The running will wear you out, which forces you to generate high tension under less than optimal conditions in the deadlift. This type of training has benefits as well, because it trains your body to perform under less than greenhouse conditions. Every 2-4 weeks I change my focus to a new group of core exercises. I also occasionally deviate from my 70-30 rule and either completely focus on one modality or just throw it all together.

With strength as one of the foundations of function, relative strength is much more important than absolute strength for functional considerations. You often hear of people who pack on weight just so that they can bring up their squat and bench numbers. Little do they realize that they will actually be weaker relative to their bodyweight than they were before. Greg Glassman of Crossfit.com developed a very interesting test of upper body strength. You perform a bench press 1RM max followed by an all out set of bodyweight pull-ups. You then take your two numbers and multiply them together to get your index number. The highest number posted so far is 9715 by Greg Amundson (335x29). Thus, if you fatten up to improve your bench, you will suffer on the pull-ups. I think this test is a great indicator of functional upper body strength. See the sidebar for a few tests I designed, with the CrossFit tests as my inspiration. Please keep in mind that these tests are not scientific in any way. The tests are designed to produce fairly similar numbers, but it is impossible to balance them evenly. With this in mind, have fun with them and try your best. The sample score of 13,467 would be an excellent score. These tests do not make any adjustments for bodyweight. However, each test has one exercise that benefits heavyweights and one that hurts them, likewise for lightweights. For example, big guys will love the squat, but this is balanced out by the 400m sprint which will be more challenging for that body type. Finally, these tests cover a wide variety of attributes, but no test can cover the full fitness spectrum. Do not limit the scope of your training just to perform well on these tests.

Functional Fitness Tests 1. Upper Body: Kettlebell Clean and Press immediately followed by max set of bodyweight Pullups for reps. Multiply the weight of the kettlebell by the number of reps performed and the number of pullups completed from a dead hang. No more than 15 presses can be counted. Move to a heavier weight if you can perform that many. One clean for every press, switch arms immediately. Example: 72x(10 presses per arm)x20 pullups=14,400 2. Lower Body: Squat 1RM followed by a timed 400m sprint. Subtract your sprinting time from 80 and then multiply it by your squat poundage. A ramp up may be used on the squat if you need a warm-up. Example: (90-55 seconds)x400lbs=14,000 3. Core Strength: Power Clean 5RM followed by a set of Hanging Leg Raises for maximal reps. They should be performed back to back and full squat cleans may be used. Warm-up sets are permissable on the Cleans. Example: (5x200lbs)x15 hanging leg raises=15,000 Finally, add up your scores and divide by three. Next subtract your worst score from your best score and deduct this number from your total points. This will punish those who are upper or lower body dominant. Example: (14,400+14,000+15,000)/3=14,467 14,467-(15,000-14,000)=13,467 Total

Kettlebells are one of a variety of tools that I think are useful for functional training purposes. Because of their design, they require better timing, accuracy and agility than a dumbbell. If you want to train for athleticism, you better move like one! The extra challenge Kettlebells bring to the table is a definite advantage in this respect. They also develop much greater grip strength and can be used in a greater variety of ways. Bottoms-up presses challenge you to express strength under less than perfect conditions, while also enforcing perfect form and developing a crushing grip. Turkish get-ups challenge you to simply get up off the ground, while one-legged deadlifts challenge you to balance and lift a weight off the ground. Having to balance and express strength, speed and agility off of one foot are very common in real life, so it is a good thing to train for. Bent presses develop excellent flexibility, strength, balance and a strong core. Simple, realistic movements and ones that require a variety of abilities are inherently more functional than movements that work the same muscles, but unrealistically, such as leg press machines. If you were to try a leg press without the machine you would fall over. It is an invented movement that has far superior real world alternatives, so why train it?
Other areas frequently ignored by most gym goers is speed and mobility. With the growing popularity of long slow distance (LSD) running and Superslow lifting, most people are ignoring speed training or labeling it dangerous. If you look at the common denominator between great athletes, excepting sports skill, speed is the most common attribute seen across the board. It is also a vital survival skill, or at least it was back when men were men and you had to chase after your next meal. Sprinting is one of the best exercises there is and possibly the most metabolically demanding activity possible. Mobility is another area that people frequently ignore. Having good range of motion and the ability to relax muscles is just as important as the ability to make them tense. As Scott Sonnon says, tension and relaxation are two sides of the same coin. However, there is a polarity between people who train for one and not the other. On one extreme you have powerlifters and you have Yogis on the other extreme. There is no rule that says strength and flexibility are mutually exclusive. Look at Olympic lifters; these athletes are some of the strongest men in the world, with extremely high degrees of flexibility as well.
My ideas on the nature of functional training are very different from the popular opinion. I prefer the Swiss Army knife approach to training. In my view, a person who trains outside of the box will be far more versatile than a person who trains in patterns and performs best inside of an artificial framework. However, do not assume that the absence of clear patterns implies a lack of organization and thought. In my model, every workout should be creatively constructed to act as a progressive learning experience. Function is the capability to do things, thus functional training should cultivate your abilities to do what you've never done before.
For some reason, there is a group of people who have defined bodyweight exercises as functional, with any use of weights being labeled unnatural and nonfunctional. My perspective is that weighted implements are like tools. The fact that we humans use tools is what allowed us to ascend to the top of the food chain. Would you build a house with your bare hands if you had tools available? Anyone who says "no" has been pounding in nails with his skull for too long. If your job is to construct a powerful body, use tools to make the job more efficient! One of the important criteria I have for functional strength is that you must be strong relative to your bodyweight. The same people seem to think that bodyweight exercises are the only way to make yourself strong relative to your bodyweight. This is simply not the case. Working with weights is an excellent way to develop relative strength, because you can vary the load in a greater variety of ways. The progressive nature of weight training is sorely lacking in most calisthenics programs. Without more sophisticated methods of progression, other than simply adding more reps, you will be on the slow road to nowhere. Fortunately, there are some bright minds out there taking calisthenics to the next level by introducing more progressive methods of resistance. In any case, the use of tools makes a training program inherently more functional, since we interact with a wide variety of different types of resistance in our everyday life.
Thus, functional training is any type of training that improves your capacity for acting under a wide variety of circumstances.