From the NYT:
With his decision, Mr. Obama became the first candidate of a major party to decline public financing — and the spending limits that go with it — since the system was created in 1976, after the Watergate scandals.
Mr. Obama made his announcement in a video message sent to supporters and posted on the Internet. While it was not a surprise — his aides have been hinting that he would take this step for two months — it represented a turnabout from his strong earlier suggestion that he would join the system. Mr. McCain has been a champion of public financing of campaign throughout his career.