LinkedIn is a business-orientated social networking site, that was launched in May 2003, and today has over 50 million registered (11 million of which are in Europe).
The purpose of the site is to allow registered users to maintain a list of contact details of people they know and trust in business. The people in the list are called Connections. Users can invite anyone (whether a site user or not) to become a connection.
Once you have established some connections, you can use them in various ways. A common use is to request recommendations. A personal recommendation speaks volumes to potential business colleagues. Potential employers or customers can't argue with it. It's of mutual benefit, and your network can soon grow.
For example, I have 226 direct connections, which link me to over 1.75million people. In other words, through people I know, there is a connection already established to an enormous number of contacts. I can search the database to find potential customers.
There are applications available too, which allow you to add value to your presence on the site. Things like "Reading List by Amazon" where you can let people know what you're reading. You can run polls, upload Google presentations, and most recently, it is now possible to tweet updates too.
For the most part, LinkedIn is free to use. However, for big business user, to advertise jobs, and make extensive use of the messaging facilities, it is possible to upgrade. It's not cheap though, and, unless it can be justified, is really only for major businesses.
I got my current contract through LinkedIn. Obviously the quality of my work, and my work ethic was important, but without LinkedIn, I would never have been given the opportunity I have now.
If you've not seen it, take a look. It costs nothing to look, and there's everything to gain.