Make TinyURL-like URLs (you.com/33ks8s) that redirect to pages inside / outside your blog. Can also create human-readable aliases (you.com/facebook).
IMPORTANT: Deactivating 1.2 and lower before upgrading to 1.3 will result in loss of any links you've created with this plugin. If you'd like to keep that data, simply replace the plugin files with the new version -- but be aware of the following: There has been a database change to enable you to set a longer character length. If you want that new functionality, you'll need to make manual edits to your DB structure to enable this (change wp_linkshortcut.ident's field type to VARCHAR(255)). If you don't want to make manual edits but would like the new features, you'll have to bite the bullet and deactivate / unzip / re-activate. Sorry.