Ocarina of Time Masks
In Ocarina of Time, there's a Mask Shop where you can borrow masks, sell them, and then return with the money to borrow more masks. The first four masks serve as part of the Trading Sequence. If you finish this entire Trading Sequence, you can get the Mask of Truth, which will allow you to speak with Gossip Stones. You'll also be able to get some upgrades as well as three other fun masks.
The Happy Mask Shop is located in the Market, right between the Temple of Time and the exit leading to Hyrule Castle. In the Nintendo 64 version of the game, the building has two giant eyes on top of it. The Nintendo 3DS version of the game still has two giant eyes, but it is much more colorful and stands out.
Trading Sequence
The Mask Shop will remain closed in the early portion of the game and will first open up after you give Zelda's Letter to the Guard at the base of Death Mountain in Kakariko Village.
Keaton Mask
The first mask you're eligible to borrow is the Keaton Mask. The guard at the base of Death Mountain in Kakariko Village spoke of it at length and how he wanted it for his child. Slap it on and talk to him, he'll give you 15 Rupees for mask. The mask is worth 10 Rupees, so this will net Link a 5-rupee profit.
Skull Mask
The second mask is the Skull Mask which can be sold to a Skull Kid, located in the Lost Woods. Enter the Lost Woods from Kokiri Forest and take the left path to find an imp playing the flute. He's kind of an outcast among the rest of the imps because he doesn't think highly of himself and his "toughness." Jump onto the stump and show off the Skull Mask. He'll buy it for a measly 10 Rupees. The mask is worth 20 Rupees, so Link will lose 10 rupees on this deal.
Spooky Mask
The third mask is the Spooky Mask and it looks just like a ReDead. Head to the Kakariko Graveyard during the day to find a small kid stomping around with a stick. His life dream is to be like Dampe, the grave keeper and to be scary. Somebody needs a hobby... Anyway, flash him the Spooky Mask and he'll cough up all 30 Rupees without blinking, which is the same cost as the mask.
Bunny Hood
This last mask isn't as obvious... The Bunny Hood (50 Rupees) is simple, but will require you to run around. In Hyrule Field, there's a guy known as the Running Man who is constantly jogging. He will only appear after Link has gathered all three Spiritual Stones. He starts out in the northeast corner and works his way around the field counter-clockwise, sticking close to the road surrounding Lon Lon Ranch. The easiest way to find him is to enter Hyrule Field from the Market and follow the road leading to the right. By the time you walk past Lon Lon Ranch, you should be able to see him.
At nighttime he will stop to take a breather, so play the Sun's Song to speed up that process. Talk with him while wearing the Bunny Hood. He's heard stories of it giving the one who wears it mythical speed and agility. Fork it over and he'll pay you up to 500 Rupees! Whatever wallet you have at this point will be filled up to the max, so it's a good idea to first acquire the Giant's Wallet to maximize the profit on this deal. The actual cost of the Bunny Hood is only 50 rupees.
The mythical powers of the Bunny Hood don't actually exist in Ocarina of Time. However, in the sequel, Majora's Mask, Link is able to acquire the Bunny Hood mask and it does increase his speed.
The Mask of Truth
After you've brought back the final mask, you'll get four new masks to try out. Three of them are just for fun, but the one of interest is the Mask of Truth, which allows you to read the minds of animals and people you talk to. It also lets you hear the thoughts of Gossip Stones, the giggling, exploding stones across Hyrule that tell you the time.
Other Masks
The three other masks that you acquire are purely for fun. You can wear them to get different reactions out of some of the characters, but they have no practical use.