Shortlinks were introduced to OpenStreetMap at the end of June 2009, by Matt Amos, as a way to have a short url to get to a specific point on the map. It is a method to go from the code to a latitude, longitude and zoom. It also works in the reverse direction too. You will see the shortlink in the bottom right hand corner of the map on osm.org. If you have a location that you want to show to people, say on twitter, then the shortlink may be a nicer method than using the standard tinyurl services.
Here is an example of the difference:
You can even add markers by appending
?m to the end of the short link and the marker will appear in the centre.
If you are a developer you may want to include support for the shortlink, in addition to or instead of the standard permalink. A good example is if your app sends twitter messages with your current location, where there is a limited number of characters that can be used, thus a shorter url is needed.