Tor is a proxy client with a slight difference. Instead of passing your traffic through just one proxy server, it passes your traffic through three, automatically connected via a random “chain.” This slows down your traffic a little, but it also guarantees you more anonymity. Since Tor’s servers are all run by different people around the world, it’s practically impossible for anyone to know that YOU communicated with (or looked at) site X: the owner of the server at one of the chain has your IP address (but doesn’t know what you’re seeing, since all traffic’s encrypted); the owner of the server at the other end of the chain knows what you looked at—but doesn’t know it’s you, because their server’s communicating with you via two other random servers.
Tor is also unique among the proxy clients in that, in its “TorBrowser” incarnation, it can be run (in combination with Mozilla Firefox, which is included in the distribution) off a USB memory key—enabling mobile internauts to use circumvention tools from e.g. cybercafés which have an open USB port.
