Obsidian farming can be done in a number of ways, but all are very similiar. Obsidian is made when water flows over a block of still lava. The water must be moving and the lava must be still.

The simplest way is to design your own little thing, but keep the same mechanics. Put up a stopper, and in the next block put a single source of water down. Underneath the stopper is where the lava should start. Make sure the lava is STILL.

Water will travel a distance of 7 tiles with the counter resetting every time it lands on a lower level. This means, that it would be pointless to have a single column of lava go over 7 tiles, because the water would not reach that far.

Code:
[s]=any type of block
[l]=lava
[w]=water
[e]=empty
Level one
[w][s][e][e][e][e][e][e]

Level 2
[s][l][l][l][l][l][l][l]
Repeat this as many blocks wide as you want, the more the better.

When you're ready, just get rid of the block stopping the water from flowing over the lava. The water will flow over the lava, make a hissing noise, and turn it to obsidian. Then just stop the water source and mine the obsidian. It will take a while, and it only drops obsidian blocks if mined with a diamond pickaxe. Nothing else will work.