well i just googled "waste yarn" and this site was the first one that came up and this is what they said about it...
Bosuns' Locker - Tricks'n Techniques
My favourite tool for new grafters and those tackling a difficult situation (yarn-overs, cables, knit/ purl stitch patterns and sock toes) is good old Waste Yarn. (To be known as WY hereafter!)
Waste yarn can be anything at all. It is best to use a contrasting coloured yarn without fluff, and of a similar weight to that used in the knitting. It is simply an aid to grafting (also known as Kitchener St) and will be removed completely once the graft is complete.
After completion of a shoulder, knit in stocking st. with waste yarn for four rows, and then bind off with WY (or slip the sts onto a thread), all the stitches to graft are laid out flat and looking just like any picture of grafting you might see in a book.
Another bonus is that tracing the path of the WY in and out of the last row of the real knitting, shows you exactly the path that the grafting thread should take. You may graft as many times as you like until you are completely happy with it, and then just rip out the WY; it also prevents the stitches from splitting into plies as you insert your darning needle.
http://www.tradewindknits.com/tbwastyn.html is the link to the site