This is a glitch in Super Mario 64 DS that, as the title implies, creates an Unloaded Town and other Glitchiness. To do this, go to Wet-Dry World at the lowest water level. Then, go up to the third level (the level below the one with the Chuckya). There will be a large metal box in front of you. Push it into the left corner, and jump on it. Go into that corner, facing the back wall. Go into 1st person view mode (press X twice), and rotate the camera to the left. Right after the camera goes behind the left wall, press X again. You will fall through the box. Now, walk into the aforementioned corner (the one you were just standing in), and you will go through! Make sure to move in mid-air, or you will fall out of bounds and die. Depending on where you moved, one of two things will happen.
First, you may end up in the water outside the level, and you can swim around out of bounds!
If you land in the tube, you will be in as normal, but there will be no water! You would probably think "Oh, I'll just go to town." WRONG! When you get to where the gates that are usually there, There will be nothing! NOTHING! Just the background of the level will be visible! Fortunately, there is an invisible barrier keeping you from falling to your doom. To get out of this, simply go to the other end of the pipe, and jump up. You will suddenly be in the water! Now, you can swim over to town. Alternately, if you end up in the water outside the level, you can dive and end up in the tube, but the town will still be unloaded. And, you can swim over the invisible "gate", and you will end up in what appears to be a bottomless pit! Since the town is unloaded, the second gate will not be there. Now, you will drown unless you exit the level, as you cannot get all the way back up the tube and above the water in time.
Why it works
Box trick: No idea.
Swim outside level: The programmers got lazy and just put a bunch of water in a flat plane around the level.
Unloaded town: Entering through the normal entrance creates water in the tube, and loads the town. Since you bypass this, you end up in a dry tube with no town.
Unloaded town 2: Since the game cannot have you come out of the water on the bottom side, you continue swimming whether or not you are in water. The gates are simply textures, so the invisible barrier is the core of the gates, so you can still get by. The town is still unloaded, so there will be nothing in your way.
Found on a GameFAQs FAQ.