Sensitization occurs when susceptible alloys are slow cooled through the temperature range of 425 to 850 C, resulting in the formation of chromium carbides along grain boundaries.  You can find a great deal of information on this topic, by performing a keyword search on google.  The following website has some excellent technical information on stainless steels:

http://www.atlas-steels.com.au/techinfo/index.html
click on Corrosion Resistance and scan down to Intergranular Corrosion for information on sensitization.

It can also occur during the fabrication process, such as when a 304 SS tube is welded to a alloy steel tube and post weld heat treated. There are cases where the weld zone cracked and failed due to such sensitization combined with exposure to chlorides during shipment or field laydown storage.