The Electronic Frontier Foundation is developing what it hopes will be the next step in online privacy and anonymity for Internet users like us. It's a peer-to-peer network (similar to the file-sharing networks) that passes information back and forth among many different points, in order to cloak a user's original entry point and make it much more difficult to be located. There have been some previous attempts to use the file-sharing networks to assist with "anonymous" Web browsing, but the anonymous utilities using P2P have been ponderously slow. Tor is an attempt to speed up the process and make it available for everyday casual users.
Tor is still in the beta testing stage, and EFF is seeking volunteers to test it and identify the bugs and flaws in the system.
EFF doesn't make any promises of guaranteed online privacy with Tor, but it's certainly a good step. As they state: "Tor is an important piece of building more safety, privacy, and anonymity online, but it is not a complete solution. And remember that this is development code—it's not a good idea to rely on the current Tor network if you really need strong anonymity."