Until recently web designers have been restricted to using fonts (for text html generated) that were installed on the users' computer, this vastly limited the designer's choice.
Although W3C introduced @font-face with CSS2, and IE has supported it via the EOT font format since IE4, it has never really caught on until now. One of the main reasons for this was the font license. Major font foundries and vendors were in no rush to license their fonts to be embedded into web pages.
Web designers still only have a limited collection of typefaces to choose from, but that collection is growing. Font Foundries are offering more and more licensed fonts for use on the web which entails using @font-face in the CSS.
W3C's push for a standard font format for the web (woff) has prompted the typography and browser industries to follow suit. Well at least some in the typography industry.
At the moment all major browsers, Opera, Firefox, Chrome, Safari and Internet Explorer can either interpret the woff format or they will be able to shortly. In the meantime they can interpret other web font file formats and you can upload a file to your server for each of the formats (there are four for each font). As in the past it is going to take some time before all users download current versions of their favorite browser so for a while we will still need to use all four font file formats.
Normally when you download a web font the font vendor will supply the license. Before you embed any font into your site you need to be sure that you have the correct license.
There are web sites that allow you to generate web fonts but without a web-font license you can get sued. One of the candidates in the primaries for the presidential election in 2011 was sued for generating a web font without a license.