The Collaborative International Dictionary of English v.0.48:

Understate \Un`der*state"\, v. t.
   To state or represent less strongly than may be done
   truthfully.
   [1913 Webster]

WordNet (r) 3.0 (2006):

understate
    v 1: represent as less significant or important [syn:
         understate, minimize, minimise, downplay] [ant:
         amplify, exaggerate, hyperbolise, hyperbolize,
         magnify, overdraw, overstate]

Moby Thesaurus II by Grady Ward, 1.0:

39 Moby Thesaurus words for "understate":
   belie, burlesque, camouflage, caricature, color, disguise, distort,
   dress up, embellish, embroider, exaggerate, falsify, fudge, garble,
   gild, gloss, gloss over, mask, miscite, miscolor, misquote,
   misreport, misrepresent, misstate, misteach, overdraw, overstate,
   parody, pervert, slant, strain, titivate, travesty, trick out,
   twist, varnish, warp, whitewash, wrench