Over the last year, we have seen a mass adoption of the @font-face property by all of the major browser vendors. Most type foundries won't license their typefaces to be used on the web because there is no openly supported closed font file type. They all fear that their files will be widely distributed for free and their licensing system will fail. This obstacle has lead to several font hosting providers. Each service seems to have a different take on how to deliver type on the web and how to charge for it.
As the major player in the market, they've set a standards for delivering fonts online. Their font library is huge; with typefaces from FontFont, Underware, TypeTogether, and P22. They even got FontFont to rehint their fonts for the screen, which were hinted for print.
Their Browser Samples tool lets you see the typeface rendered in different sizes, in different browsers, in different operating systems. Otherwise you would be testing the type rendering like you do your CSS but have less control. It comes in really handy to say the least.
Their yearly rate might be hard for you to sell to your client or boss and many designers are used to paying for a font license upfront and are hesitant to have a yearly font cost. You'll be relying on them to host your files for you.
Font Squirrel promotes 100% free fonts for @font-face embedding. Their biggest resource is their @font-face kit and generator which is pure awesome. They generate all the pesky files types for you and produces the @font-face code recommended by Paul Irish for you.
Free comes with a cost and in this case its quality. Some of the typefaces have horrible hinting and kerning tables or none at all. Some are just horrible. There are some diamonds in the rough though (see Exljbris and The League of Moveable Type) if you pick well.
Font Spring is the paid version of Font Squirrel. They offer a more traditional way to buy a font license but for the web. The quality of fonts on Font Spring are a bit higher and none are very expensive.
In both cases you get total control over the files, how they are hosted, used and implemented, as long as you stay within the license.
Fontdeck is another hosted solution, like Typekit, that was recently released out of a closed beta. Its anual charge is for the font that you select for a domain. Not for the whole library. They only have a select few foundries represented and a small library but I assume that they will be getting more on board soon.
Google recently released its hosted solution with the help of Typekit. Thier collection is relatively small and doesn't have much that I would call useable. Right now all of the typefaces are free Creative Commons typefaces including typefaces commissioned by Google (Droid, Droid Serif). It will be interesting to see what steps Google takes in this direction, if they take any.
A small foundry that offers a full (both web and print) and web license for their typefaces. They host their files but use CSS to deliver them to your site. They even will serve font files with selective character sets so that you save on download speed. You'll be relying on their cloud hosting to keep their files up an you have no control on the way that they implement the @font-face.
After teaming up with Typekit, FontFont is delivering their typefaces independent of Typekit. FontFont is one of the more forward thinking foundries, having already started hinting some of their collection for screen use. They are offering the font web license only for EOT (IE only) and WOFF (Right now only supported by Firefox 3.6 but hopefully more in the future) which could be segmenting out a bunch of your traffic.
Type Front hosts your already purchased font files that have a web license for them. It then gives you the ability to control what domains that you want the font to be distributed to with ease. It then produces the needed file formats and gives you the css that you will need to put into the head of your site.
A free open source hosted solution. If you don't want to pay for Typekit or try using @font-face yourself this would be a good option.
Fonts Live, Webink, & Webfonts
All are hosted solutions run by Acender, Extensis and Monotype respectively. Each has been a big player in the desktop publishing world and now trying to get their hands in on the web. I've yet to try any of them but I'm sure each will have a large library but limiting implementation.
I can tell you that the folks at Extensis, Ascender, and Monotype are genuinely happy and enthusiastic about providing fonts for the web. But certainly they won’t be quick to point out that the delivery system for those fonts is crafted within the constraints of a clever but hacky DRM-like structure.
Web Fonts at the Crossing by Richard Fink
Best foot forward
If you feel comfortable hosting and delivering your own fonts look to Font Spring and Font Squirrel. Otherwise, Typekit seems to still be a few steps ahead of the other competition. The best questions to ask are what kind of control you want over the files, what kind of hassle are you willing to deal with and how you plan on selling it to your clients. Richard Fink has also created a checklist for hosted font solutions. Like almost everything else, it really depends on whats best for you and your situation.