For this to work (still works in redstone update) you need: 1 bucket of water, 1 bucket of lava, a diamond pick (to mine the obsidian you make), some building blocks (at least 3 to block in the lava more if you want to cover it up) 1 Piston, and as many redstone as you want to make abosidian. This is not an infinite glitch trick it is trading redstone dust for obsidian (the redstone dust is lost in the process) make a cobblestone generater with the piston in position to stop the lava flow. place redstone between were the water will meet the lava (redstone must be UNpowerd to work or it will just make cobblestone and you will lose the redstone anyway) from a top down view it should look like this..

W=Water, H=Whole for water to flow into, L=Lava, P=Piston, R=Redstone placement v=arrow to represent direction of piston arm.
O=Opening were I place a stone pressure place (not needed)

PB
WHRvLB
O B