Dropbox: Share files instantly and easily across mac, pc and web. For teams. Has file versioning. Freemium. (108 chars)
Grooveshark: database with millions of songs. Visit site to play music for free. (80 chars)
Amazon: sell books online. Cut out middle man (bookstore). Share profit with customers. (88 chars)
I haven't put much effort into this, but it looks like 110 characters is plenty.
Your description of Dropbox leaves out why it is different from the legions of other online file sync services that are kinda OK or just lame, for instance. Putting yourself back into 1995: "why would anyone want to buy books online when there's Barnes & Noble, Walden, etc right down the street? Ecommerce is great and all but 'Blah.com: buy X online' is not necessarily a reasonable idea."
If I had never heard of these before I don't know how you could describe what it does as well as essential other details that don't fit into 111 characters.
Luckily, investors like Richard Branson want ideas to be _new_ in order to be worthy of investment. And if you want to do something new, then you should be able to explain what's new in a few words. 111 characters is an arbitrary limit, but it's not terrible.
Amazon is new because it cuts out the middle man, and promises better margins for publisher and customer alike. That sounds like a good idea right away. Also, not everybody lives close to a Barnes & Noble, so the idea of delivery of books is by itself cool.
With an elevator pitch you only have a few seconds anyway. So you simply HAVE to convey as much as possible in as little time as possible. When you restrict yourself to a number of characters you can try to fit as much as possible in there. A much better metric than "3 sentences" or "10 seconds", because those two metrics can be gamed (sub sentences and talking rapidly).
111 characters is a gimmick, sure. But it's a _cool_ gimmick.
"Provide health care to everyone, employer subsidized, co-ops, non-profit".
"solar powered clean drinking water for rural areas".
I might as well say "Space time continuum, user generated, freemium"
Twitter: system for people to broadcast tidbits of information. Listener opts in. Sender does not expect reply. (111 chars)
This was my best attempt, because it raises enough questions to see that yes, twitter is different. It doesn't make an attempt to prove it's a good idea, just that it hasn't been done before (and is therefore worthy of investment).
I suppose I should have a go since I made the challenge: Tell the world what you're thinking RIGHT NOW. The world listens only to people it thinks are interesting. (107 chars)