Basically 3 guys from somewhere in America ( Im not sure where) all had rubbish bikes (probably beach cruisers). They had a pick up between them and one day they decided to go up a hill and cycle down it. When they got down they thought it was fun, and then went up in the pickup and down again, this is how downhill mountain biking started.
If you want to learn more I would recommend reading the book To the Limit Mountain biking. It is really useful, and tells you about many types of mountain biking.