Seems like every couple of months, a major security breach story hits the news — and I don't mean thieves cracking into Sony's account servers; I mean the police breaking down some dissident's door in a political trouble-spot, or even companies like Apple and Google tracking everything you do without your knowledge. Want to throw a wrench in attempts to track your online life? Have a look at Tor.
There are a lot of people on the Internet for whom this is critical functionality. Anyone living in — or visiting — a country where the state monitors communications might need to keep prying eyes away from his or her online message board visits. People facing threats or harassment and employees in danger of reprisals need to protect themselves. Companies may need to keep the locations of their remote workers secret (which a VPN alone cannot do) or browse the competition's Web site without being noticed. And the general browsing public may need to simply get away from the constant profiling and tracking by commercial companies.
Tor has its origins in a US Navy research project, designed to keep classified communication channels secure. At one point, the name was an acronym for The Onion Router, which helps most people understand how it functions. Requests from the browser (or other service; Tor works with chat, IM, and other applications as well) take a randomly-selected path between Tor nodes, each step of which is encrypted. Because there are multiple layers or encrypted forwarding (there's the onion metaphor), it is impossible to associate any single hop with any originating request. Also akin to the metaphorical onion, each layer is completely separate from those on either side of it: a Tor node doesn't know where a request it is funneling came from, or where it will ultimately arrive.