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The "ear confession" as we know it today is an invention of Irish monks (some 6th century? I'm not sure). Before that time, only heavy sins (especially renouncing Christ) were confessed in front of whole congregation. Private confession allowed to confess all sins. This practice spread with Irish missionaries quickly. It was codified as mandatory (at least once a year) on IVth Lateran council (1215).
EDIT: wikipedia on the Sacrament of Penance (Catholic Church) focuses on penance, so the beginning of the practice of confession is bit obscured, but it gives further details and approves the codification in 1215.
EDIT 2: wikipedia article on Celtic Christianity gives more details and cites Medieval Handbooks of Penance.