Mario's move list is seemingly endless -- even expert players may not be aware of this one. To perform the awesome flipping high dive, you need to find a place high above deep water. Try Starshine Beach -- run up the small sandy incline at the start of the level and look for a wooden plank hanging off of one side. Walk to the edge and Mario should look down at the water. Turn around while standing in this spot and perform a back flip by holding Z on the nunchuk and pressing JUMP. Mario will then perform this obscure move.
Addition by Rory: While on the wooden plank in Starshine Beach Galaxy or on the ledge with the 1-Up mushroom in the Slimy Spring Galaxy, run until you are at the edge, stop and then jump in one, FLUID motion. Mario will perform a front flip and then dive.