The two big pieces of Bitcoin are the currency and the network. The Bitcoin network enables electronic payments, not such a big deal really, there are lots of payment systems. However the Bitcoin network let’s you transfer money (bitcoins) in an incredibly efficient manner, and one which is not dependent on any central control or central point of failure. Each financial transaction is cheap, really really cheap.
One logical extension of this efficient, inexpensive financial transaction network is the ability to create extremely small transactions. It is reasonable and feasible to create electronic payments that are worth less then a penny. This is actually a BIG DEAL! It means, for example that a wifi network could be created that let’s you connect stay online for a few minutes and you just pay for that miniscule amount of time.
In a wonderful video “Bitcoin Fireside chat with Marc Andreessen and Balaji Srinivasan“, the two VCs discuss micropayments (and a lot of other stuff) a bit and point out classic use cases. First bitcoin could have solved the email spam problem by charging a tiny amount to send an email which would quickly bankrupt the spammers and have no effect on normal users. Secondly using bitcoin micropayments to allow for payment of articles on websites (like this one!), where you just pay 5 cents or 25 cents. The efficiency of the Bitcoin payment network allows such transactions whereas the overhead of other payment systems make such payments prohibitive.
So when is this all going to become a reality? Not too quick however code to enable micropayments is being actively developed by core bitcoin developers (see Jeff Garzik’s https://github.com/jgarzik/mcp for the more technical adventurous). Additionally there is a much more thourough discussion of micropayments on the bitcoin wiki at: https://en.bitcoin.it/wiki/Contracts#Example_7:_Rapidly-adjusted_.28micro.29payments_to_a_pre-determined_party
Bitcoin just keeps getting more and more interestinger