Mac OS X Services let one application supply its powers to another; for example, a Grab service helps TextEdit paste a screenshot into a document. Most users either don't know that Services exist, because they're in an obscure hierarchical menu (ApplicationName > Services), or they mostly don't use them because there are so many of them.
Snow Leopard makes it easier for the uninitiated to utilize this feature; only services appropriate to the current context appear. And in addition to the hierarchical menu, services are discoverable as custom contextual menu items - Control-click in a TextEdit document to access the Grab service, for instance.
In addition, the revamped Keyboard preference pane lets you manage services for the first time ever. You can enable and disable them, and even change their keyboard shortcuts.
From Doug McLean