Although it hasn't received much coverage, the services menu appears to be one of the niftier features of OS X. To get a brief example of how it works, open the Mail application, pick any message, reply to it, and select all the text. Make sure Terminal is also running, although you don't need to have a session open.
Under the Mail menu, select Services, then Terminal, and finally Word Count. All your text will be replaced by a series of three numbers - 7 57 362, in the test I ran. This translates to 7 lines, 57 words, and 362 characters.
For a second demo, start a new email message, and pick Time under the Terminal services menu. The current date and time will be pasted in your email.
Although these are neat demos, the real power appears to lie in the fact that we will (hopefully!) be able to add our own services in the final release. To see what this could look like, look at the Terminal Services menu under Terminal in the (you guessed it!) Terminal application.
Since the terminal application has incredible power, the ability to add a service which will then be available to any application seems like a very useful thing!
I added a test service, but I haven't been able to make it show up in the services menu in other apps yet, but I'll post something if I do.
Mac OS X Hints
http://hints.macworld.com/article.php?story=20001125001333149