I've come up with a little utility (download here) which runs as a tray-app which periodically scans the clipboard looking for URLs. When it detects one it pops up a balloon as asks if you would like it shrunk.
If you click the balloon it will go off and talk to Shrinkster.com and turn that URL into something smaller. At the same time it will update the clipboard with the smaller URL so you can paste it into whatever document you are working on without having to go to the site, paste in the URL, submit it and copy it back into the clipboard.
If you don't know what Shrinkster.com is, check it out! It is a cool little web-app like TinyURL.com. I was put on to Shrinkster.com after listening to .NET Rocks! (I think they were using TinyURL.com up until then).
Anyway, download the setup file and give it a go, let me know if it rulz or droolz, and to tell others about it.
P.S. Thanks to Kyle Tinsley (blog?) from Shrinkster.com for making the scraping a little easier and to Darren Neimke from RegExLib.com for the regular expressions advice via IM, oh an to Geoff Appleby for being my post man, oh and Hans Blomme (blog?) for his cool NotifyIconXP (link shrunk with Shrinklet 
) component. And also . . . *music starts*