Wait, you say, that sounds just like BitTorrent. It is, indeed, the same idea: users who download the file share the bits they've got with others. But Red Swoosh is easier to use that BitTorrent. You don't have to create "trackers" or learn a new application--you just prefix your file link with http://edn.redswoosh.net/, and the file becomes part of the peer-to-peer cloud.
Users who want to access the file do need to install Red Swoosh software (Windows only, no Mac or Linux version yet). It's small and has no user interface, and the company promises to not abuse your PC's bandwidth or spy on you. But I'm not sure non-nerds will be willing to install the software as long as video sites, such as YouTube, and download sites, such as CNET's own Download.com, allow direct downloads for free. (Download.com used to distribute files over a P2P network, but ultimately we found the direct-download model better for users.) However, video-sharing sites may ultimately join this or another P2P network, especially when they begin serving bandwidth-intensive HD videos.
If you want to employ the service, you can't just point Red Swoosh to a file on your PC to make it available. It has to already have a public URL. This also sets Red Swoosh apart from BitTorrent and adds a measure of accountability to the system, so it's much less likely to be used for piracy. It is a minor roadblock (it adds a step to publishing) but also has a big user benefit: if there are no users online who've already downloaded a file, the Red Swoosh network can go to the online source to get it--you won't have the dead-tracker problem you have with BitTorrent.