The magic behind DropBox is that it uses cloudstorage (S3), encryption technology, and advanced syncing methods to keep everything working up to high standards.   Their free account provides you with a generous 2gigs but you can always upgrade with paid accounts.

While their desktop app is great, the addition of their iPhone application changes the game completely. You can access 2 gigs of data from your iPhone, share files with peers, sync remotely, and view various types of documents.  I was quite impressed how dropping a Word document into the dropbox turned into a readable RTF on the iPhone.  In addition, the documents almost appeared instantly, but of course this would depend on size and your connection.

To me, the DropBox application is as useful as the standard iPhone applications that come pre installed.  When I first used my iPhone, I was surprised it was not particularly easy to move files on and off, or to view various types of common files.  With the DropBox app, you have a file explorer, large remote storage, and a viewing program all in one.

If you don’t have this application yet, you should get it right now, it’s free after all.