Freenet is free software which lets you publish and obtain information on the Internet without fear of censorship. To achieve this freedom, the network is entirely decentralized and publishers and consumers of information are anonymous. Without anonymity there can never be true freedom of speech, and without decentralization the network will be vulnerable to attack.
Communications by Freenet nodes are encrypted and are "routed-through" other nodes to make it extremely difficult to determine who is requesting the information and what its content is.
Users contribute to the network by giving bandwidth and a portion of their hard drive (called the "data store") for storing files. Unlike other peer-to-peer file sharing networks, Freenet does not let the user control what is stored in the data store. Instead, files are kept or deleted depending on how popular they are, with the least popular being discarded to make way for newer or more popular content. Files in the data store are encrypted to reduce the likelihood of prosecution by persons wishing to censor Freenet content.
The network can be used in a number of different ways and isn't restricted to just sharing files like other peer-to-peer networks. It acts more like an Internet within an Internet. For example Freenet can be used for:
Publishing websites or 'freesites'
Communicating via message boards
Sending email messages
A different way to send info over the internet.