I came across Bit.ly on Lifehacker today and probably would have passed right over it if it weren't for the fact that it helps to solve a current problem we are seeing. It was recently brought to my attention that Spamhaus has started blocking some emails that contain links to the blogspot.com domain because some spammers have setup shop on blogspot and sent out URL's linking to their sites. (Editorial on blocking the blogspot domain: Ridiculous. Here's an idea, let's block the gmail.com domain because some spam has originated from it.) Anyway, sorry for the tangential rant here.
The point is that we had to figure out a way for someone whose blog resides in the blogspot namespace to be able to send out emails referencing his scholarly blog posts. My first thought was TinyURL. It would provide a good wrapper for him to get his links through. But, then I learned about Bit.ly.
It functions exactly like TinyURL does, but it provides stats and tracking for your links. So, if I create a bit.ly link to one of my pages and send it out to a bunch of people, I can actually see how many people clicked the link! Sweet. I am a major stats junkie, so this is right up my alley.