Was baptism practiced before Christ? A simple word search for "baptism" in the Old Testament turns up no matches. However by the time John the Baptist shows up on the scene and starts dunking people and calling it "for forgiveness of sins" (Mark 1:4) people seem to already have an understanding of what baptism is.

In fact, it seems there might have been other sorts of baptisms practiced at the time other than what John and later Jesus talked about. In particular the questions that pop up seem to be about who was doing the baptizing and on what authority. Nobody seems be too concerned about the act itself -- as if it was a well understood thing already.

Since the OT doesn't seem to speak of it and the NT jumps right in with everybody seeming to understand that such a practice exists (even if there is some question as to who/what/how/when), what happened in between the Testaments? Was baptism something that was done by anybody for any reason? If so by who and what for? Did the religious Jews of the time have such a practice?
Ritual cleansing was a common part of some Jewish sects around the turn of the era. One of the best examples of this (that I know of) comes from Khirbet Qumran (where the Dead Sea Scrolls were found)—where there were found several miqvot (sn. miqveh) used for a sort of "baptism." It is commonly held that the people living at Qumran were Essenes, and some have speculated that John the Baptist may have been a part of this group or one similar to it.

The Qumran community began slightly before the turn of the age and continued into the early 1st century CE, so it was roughly contemporaneous with Jesus. For a really nice intro to the Archaeology of Qumran, see Jodi Magness' The Archaeology of Qumran and the Dead Sea Scrolls.

There is a ton of literature from and about the "inter-testamental" period (usually referred to as the "Second Temple Period" by scholars). I'll point you to the great intro to the corpus by George Nickelsburg, Jewish Literature Between The Bible And The Mishnah.