The rise in Twitter's popularity has spurred the rise in popularity of another technology, URL shorteners. Twitter's 140-character limit on messages does not leave much room for a long URL. Thus the need for a URL shortener.
For example, in a recent tweet by NextMark (twitter @nextmark) on the 1q09 results of the data card quality report, the URL https://nextmark.typepad.com/blog/2009/04/list-brokers-do-care-about-data-cards.html (84 characters - more than half the allowed message length) was shortened to https://bit.ly/9WTH (only 18 characters!):
But not all URL shorteners are created equal. In fact, some URL shorteners, like Diggbar, are considered evil. There are a surprising number of issues to consider when choosing an URL shortening service. You could certainly roll your own and have full control. But there are plent of good commercially available solutions available for free. Danny Sullivan does a great job of summarizing your options in his article "URL Shorteners: Which Shortening Service Should You Use?"
Update: One that was not on Sullivan's list: ow.ly is also evil. This one followed the lead of Diggbar by pointing to the ow.ly website with the destination site in their wrapper.
This brings up the good point that URL shortener services can change their software at any minute. Today they do a 301 redirect (good) and tomorrow they point to their website with your site in their wrapper (really evil), which steals your "link juice", screws up your analytics, and generally undermines your business. Be very careful of these services.
My advice to you: roll your own URL shortener if you have the skillz in house. It's not that hard. Or do your homework and pick a service that is good now and won't switch schemes down the road (get that in writing).