Here's the scenario: You're in the kitchen on your laptop. Your speakers are in the livingroom. You want to listen to something off your itunes library (or even pandora), but the speaker cable won't reach... And why should it? We're in a wireless world, right?
Using Airfoil, you can stream music from a computer to all sorts of devices (iPhone's, other computers, etc.). In my scenario, i plug my iPhone into the speakers and open the free airfoil app. Then, I open the airfoil app on my computer and use it to send whatever music i want to the iphone. Voila! I get to work from the comfort of the kitchen table and have the quality music come from my nice speakers in the living room!
Here's a bonus scenario. Say you're having a house party. You're going to want music in all the places where people are gathering: on the patio, in the den, and also in the kitchen/dining room. You can use airfoil to send music to multiple devices (e.g., an iphone, and 2 macs) and all the music will be synced perfectly!
Airfoil is free to try, $25 to buy and available for mac and windows. Alternatively, you could spend $99 on an airport express or apple TV (or more for the fancier models) that also works as a wireless router. If you're in the market for a wireless router, this is a great option, however it's a little less versatile because it wont work at say, a friend's house. As far as I know, there's no way to play pandora over an airport without airfoil.