From Bulbapedia, the community-driven Pokémon encyclopedia.
A Ball Capsule (Japanese: ボールカプセル Ball Capsule) is a special item introduced in Generation IV that can be attached to a Pokémon's Poké Ball to add special effects when the Pokémon is sent out in a battle.
Ball Capsules may be accessed from the player's own PC. There are twelve spaces for them to be saved on, and their appearance can be altered by adding Seals to their exteriors, creating the aforementioned special effects. Most Seals can be purchased in the Sunyshore Market at Sunyshore City. Eight Seals can be attached to any Capsule at one time.
If a Pokémon whose Poké Ball has a Capsule is to be placed in the Pokémon Storage System, the Capsule must be removed. Likewise, when a Pokémon is traded, the Capsule will automatically be removed.
NPC Trainers in Pokémon Platinum use Ball Capsules on their Pokémon, notable examples include Volkner and Flint who have Capsules on their Electivire and Magmortar, respectively.
Ball Capsules and Seals were removed in Generation V.
In the anime
When Pokémon Coordinators debut in Pokémon Super Contests, they get a Contest Pass, a Ball Capsule, and a few Seals. These were first shown in Mounting a Coordinator Assault!. While Contests seem to be their main use in the anime, they cannot be used in Contests in the games.