In listening to Issues, Etc. 24, Pr. Jonathan Fisk had great comments on hermeneutics before getting onto his given topic of the Lord's Supper--if you want to hear for yourself, they podcast all their broadcasts, and it would be well worth the listen once that podcast is available (probably later today or tomorrow).
What is hermeneutics? Simply, it is the study of interpreting text, or in specific for our purposes, the study of interpreting the text of the Bible.
The greatest point that I heard was that we often bring the Devil's first question, "Did God really say that?" into our reading of the Bible. Or, perhaps more specifically, when we come to a passage that we don't like or can't understand, we often seek other Scripture not to allow Scripture to interpret itselves, but to allow Scripture from somewhere else to trump that passage and explain it away.
As a child has faith their parents will protect them or feed them or love them, etc. without needing to understand "how" (they might ask, but generally they ultimately accept it without truly comprehending the entirety of "how"), there is no where in Scripture, other writings (Christian and secular) or anywhere else that says we, as humans, are to understand everything and know the "how" and "why" of absolutely everything. Sometimes we simply need a child-like faith that understands stated truths without needing to realize everything behind it.
A specific example, and one I'm very familiar with, was that Ken Ham (Answers in Genesis) in most of his books and speaking engagements wonders why Christians cannot understand the plain language of a day meaning a day, and yet he does not hold the Bible to be clear and plain when Jesus gives us the Words of Institution.
Even other Christians who claim to hold a "literal" interpretation of Scripture often deny the Words of Institution and other clear, plain language in the Bible, while holding to figurative or non-literal passages as truth (i.e. Revelations).
After listening to a previous Issues, Etc. podcast on Dispensational Premillennialism, I made this comment on Facebook: "Great point re: Dispensational Premillennialism. Everyone I know who subscribes to that belief claims to be a "literalist" when it comes to Biblical exegesis and interpretation, and yet I don't know any Dispensational Premillennialist who also subscribes to a literal interpretation of the Words of Institution ("this IS My Body", "this IS My Blood of the NEW covenant"). So... are they only literalists when it comes to eschatology? If that is so, what other parts of the Bible don't they take literally, or is that only regarding the Eucharist? And how can they claim to be literalists if they don't believe in a literal interpretation of EVERYTHING the Bible says?"
Ultimately, proper hermeneutics means knowing what is being said (a study of the original languages is extremely helpful to this end), understanding the context (what do the verses around it say? to whom was this written? why was it written? who wrote it? when was it written? etc.), realizing that many translations are inaccurate to the context (surprisingly, humans tend to bring their bias into translation efforts--who would have thought that?), always allowing Scripture to interpret Scripture (even passages we don't like or make us uncomfortable), and most importantly, not allowing the Devil to creep in and cause us to ask, "Did God really say?". Scripture never contradicts itself if you understand context, which is absolutely key in hermeneutics. We don't need to know everything, we don't need to understand everything, we just need faith.