Columbia Pictures Industries v. Fung
A diagram of a BitTorrent network. The central computer is uploading the file, but all of the downloaders are downloading from each other as well.
Diagram: Scott Martin
Although torrent sites like Fung's have been shut down due to inducing infringement, the BitTorrent technology is used for many other applications. It is especially well-suited to game updates (see the question on "large files"), because millions of players will be downloading the same update at the same time, which would cripple to game company's servers and is the scenario where BitTorrent works best.