Two truths and a lie is a popular bluffing game. One person will make up three facts, two real and one made-up, and the other players will try to guess which one was the lie. The format is very flexible, the facts can be simple sentences or entire stories, personal facts or current events, funny or completely serious. NPR's Wait, Wait... Don't Tell Me! radio show even has a variation with two lies and a truth. Guessing correctly wins the caller Carl Kasell's voice on your home answering machine. Wertperch tells me there was a British TV game show called Call My Bluff that also followed this format.
Two truths and a lie is a popular party game because it can help guests get to know each other, especially if the theme is facts about oneself. In a party setting, the facts can either be made up on the fly, which is best for telling things about yourself, or the host can pass out pre-prepared facts and the challenge would be making the lie believable. Either way, it gets strangers talking to each other, which is the goal of any good party host. Even the most elaborate version is cheap to play, if you need any materials at all it's limited to pens and paper.
The challenge to lying well is twofold. First the lie must be believable (this is easier when one of the truthful statements is extraordinary). Second, you need to have a good poker face — body language can quickly reveal a lie if the speaker isn't careful.
Some board games that are similar in concept are Balderdash, Malarky, and Wise and Otherwise; although it's more like four lies and a truth in this case. Each of these games involve trying to bluff the other players into believing your version of the truth, trying to make it more believable than the real answer. In Balderdash!, the players try to guess obscure word definitions, in Malarky, they try to answer weird questions, and in Wise and Otherwise, they try to complete little-known proverbs, adages, and expressions. In each one, players vote for the answer they think is real and the player whose lie was voted highest wins a point.