If you use Twitter, then you definitely know what a TinyURL is. If you don't, it's a service that shortens your URL so it will fit within the 140 Characters that Twitter provides for every tweet. Bit.Ly is a 'Simple URL Shortener,' that also provides tracking for each 'bit.ly' that is generated. It's simple. You can sign up for a free account, and even sync your Twitter account to it, so if you decide to share a link on Twitter, Bit.Ly will keep track of how many people have clicked on that link, as well as referring sites and where in the world the bit.ly link was clicked.
The great part about using bit.ly is that you can sync it to your TweetDeck so you don't have to log into your bit.ly account through their website.