A no-look pass should be used when the ball handler knows the location of a teammate he wants to pass to, but is worried the defender is expecting the pass. Looking in the other direction cues the defender to defend elsewhere, opening up a lane for a no-look pass.
No-look passes should only be attempted by skilled players who have practiced the no-look pass and can effectively execute one.
Another important component is the receiver. The player who the ball handler is passing to should be ready for the pass. If the teammate is not prepared to receive the pass, the ball handler shouldn't use a no-look pass.
Defending a no-look pass is difficult, but not impossible. As a defender, it's important to have your head on a swivel. This means knowing your surroundings and being observant of what's happening. If there is an open offensive player, and the ball handler's hands are facing him, be ready for a quick no-look pass!
If the no-look pass moves the ball to the outside or back towards the other end of the court, it's not a big deal. These passes are not towards scoring areas, and are thus okay to allow as a defender.