Articuno in Blue. Thing was kicking my ass, and I hadn't saved in a while, so throwing the Master Ball seemed like the only way to avoid losing my progress. I didn't even realize it was a legendary until later.
Either Zapdos or Moltres in Red. I can't exactly remember which was first, but they were the two legendaries that were relatively easy to get to (I knew my way through Victory Road by heart and the Power Plant was simple; Seafoam Islands sucked and I wouldn't have gone there first) and I don't think I knew about Mewtwo at that point.
So heres my issue with those of you saying you used it on a level 2 pidgey or something of that nature. You get the Masterball at a point in the game where you're well passed the point of encountering those. And even if you return to an area that has them why in the world are you attempting to catch them? Did you not for whatever reason try and catch them when you first left pallet town? I think we've got some liars or some extremely odd players here.
Well, I could be wrong, but I believe diversity is an old, old wooden ship that was used during the Civil War era.