From Webfonts.info
Webfonts are font files embedded in websites using the @font-face rule. This technique was first available in Netscape Navigator 4 using Bitstream's TrueDoc standard but was discontinued in Netscape Navigator 6. Microsoft developed the Embedded OpenType format (.eot) which is supported in Internet Explorer since version 4. In march 2008 Apple introduced Safari 3.1 which supports the @font-face rule, but it doesn't use any of the previously mentioned formats, but the popular font formats TrueType and OpenType (with TrueType or PostScript outlines). Other browser makers are following Apple's lead. Firefox 3.5 and Opera 10 will also support direct linking of TrueType and OpenType fonts using the @font-face rule.
Browser Support
For the current status of browsers supporting webfonts see this page.
Which fonts can I use?
Commercial fonts can often not be embedded in website using the @font-face rule, because the font files need to be uploaded to a public server, where they could be downloaded by anyone. Some font vendors allow the embedding of EOT files, but not TrueType or OpenType. You need the check the End User License Agreement (EULA) of the font vendor before embedding a font in your website.
The webfonts.info holds a list of typeface available for @font-face embedding:
And here is a list of commercial font foundries which allow @font-face embedding:
Using Webfonts
See our How to's section for more information and code samples.