Nitric Oxide is a free form gas that is produced in the body and is used by the body to communicate with other cells in the body. To produce Nitric Oxide, enzymes in the body break down the amino acid Arginine.

Nitric Oxide is a molecule consisting of one atom of nitrogen and one atom of oxygen. The production of Nitric Oxide occurs when the amino acid L-arginine is converted into L-citruline through an enzyme group known as Nitric Oxide Synthase (NOS).
Nitric Oxide controls the circulation of blood, transmits messages between nerve cells, is a mediator of inflammation and is associated with the process of feeling pain, muscle growth and the dilation of blood vessels.

The fact that nitric oxide increases blood flow should make it of interest to bodybuilders, as increased blood flow will serve to deliver more nutrients to muscles, thus helping muscles become larger when subject to stress - a muscle pump that remains in its post-exercise, blood-engorged, rock-hard condition all day long. The fact that Nitric Oxide acts to reduce inflammation should also make it of interest to bodybuilders as it has the potential to reduce the pain associated with subjecting muscles to extreme stress.
Nitric oxide also affects the endocrine system. It affects the release of gonadotroptin releasing hormone, as well as the release of adrenaline from the adrenal medulla.

With any amino acid containing product, overdose is a possibility. Dosing with too much arginine can lead to diarrhea, weakness and nausea. Clear dosing guidelines have not been established, so it is best to do what is known as "tolerance mapping". Take a small dosage for one week, note the benefits and the side effects, and increase the dosage until the benefits are maximized and the side effects minimized. Over time the two will converge and you will hit the optimal dose. This process is similar to "receptor mapping" for bodybuilders who use insulin.
Many protein powders are fortified with amino acids, including arginine. With this in mind, pay particular attention to how much arginine you are ingesting from all supplements taken. Most supplement manufacturers use Arginine in the form of Arginine Alpha-Ketoglutarate. This is basically two Arginine molecules attached to one Alpha-Ketoglutarate (a precursor to the Amino Acid Glutamine). Manufacturers use this form because it enhances the Absorption of Arginine, as well as give the added benefit of indirectly providing Glutamine.