Shrink is a command for Ubiquity - a neat Firefox extension, which allows you to do all kinds of neat things within your browser, by telling it what to do rather than where to go.
Shrink allows you to shrink long URLs when you're composing forum posts, blog entries, Twitter/Jaiku/identi.ca/etc. posts or emails - simply select the URL, call up Ubiquity, type "shrink" and hit enter. This makes for a neater, shorter message, with hardly any effort at all.