Does anyone understand how this service works? It would be nice to have an FAQ page on the website or something...
You create
1. One or several team groups
2. One or several user groups
You can then proceed to push pre-release builds to TestFlight and have specific groups of users (press, volunteers, friends, iPod/iPhone 3G/3GS/4) try the build, before it's sent to the App Store. Sending a release to the App Store before testing it with a larger group of users can be pretty catastrophic.
As a bonus, you basically drag and drop your .ipa(?) file to the browser, and TestFlight does the rest. The users can then proceed to get the build through TestFlight's HTML5 app.
Before, as I understand, the alternative was to send your app files to people and have them import it in iTunes.