Oracle Text

Prevent the next X damage that would be dealt to target creature this turn. For each 1 damage prevented this way, put a +1/+1 counter on that creature.

Card Rulings

10/4/2004 You can make X be larger than the amount of damage, but you only get one counter for each actual point of damage prevented.
10/4/2004 The +1/+1 counters do show up at the same time as any unprevented damage, which means they are there before you check for lethal damage.