This Wikipedia link has a good run down on the understanding of "this generation" and how it changed:
Eschatology

The recent changes were 1995 when >80 years from 1914 arrived change was made to "contemporaneous group of people" with no specific length of time or strong tie-in to 1914. The "purpose" statement in Awake! which mentioned 1914 was changed at this time.

This lasted until 2008 when "generation" was applied to any anointed alive during the end. In 2008 the idea of the heavenly calling ending in the 1930s with only "replacements" being made for those who died unfaithful was dropped. This has resulted in more partaking, and if you are cynical one might suggest increase to pool of capable "anointed" men to become governing body members.

Of course the true meaning of the words put in Jesus mouth here are probably best understood to be literal. I.e. that readers (or the listeners if it was truly spoken and recorded verbatim) some 1,976 years ago literally understood their generation would not pass away before God's kingdom rule started. Alas, it seems people having trouble coping with the injustices of life long for a solution not in the far distant future, but something that will happen in their life time.

Cheers,
Rawe