Tor is an "onion router" which allows you to surf anonymously. It basically works by bouncing your web requests via other addresses using a proxy.
From their website:
Tor is a toolset for a wide range of organizations and people that want to improve their safety and security on the Internet. Using Tor can help you anonymize web browsing and publishing, instant messaging, IRC, SSH, and other applications that use the TCP protocol.
Your traffic is safer when you use Tor, because communications are bounced around a distributed network of servers, called onion routers. Instead of taking a direct route from source to destination, data packets on the Tor network take a random pathway through several servers that cover your tracks so no observer at any single point can tell where the data came from or where it's going. This makes it hard for recipients, observers, and even the onion routers themselves to figure out who and where you are. Tor's technology aims to provide Internet users with protection against "traffic analysis," a form of network surveillance that threatens personal anonymity and privacy, confidential business activities and relationships, and state security.http://tor.eff.org/This a free open-source program which anyone can use. To set it up, you also need to download the free program privoxy and then set something in a config file (a text file) and set something in your browser's preferences. Takes about 5 minutes to set up.
From then on, open Tor before you open your browser, and your IP address will no longer be traceable. To test it, go to showmyip.com and it will show you as surfing from somewhere far from where you live! Another thing that will happen is that google will show up in different languages - because google is "localized" depending on where it thinks you're browsing from. (This isn't a bug, it's a feature - kind of cool to be exposed to different languages for the google interface - but of course you still get exactly the same google search results.)