Good news. It's back! According to the tr.im blog:

We have restored tr.im, and re-opened its website. We have been absolutely overwhelmed by the popular response, and the countless public and private appeals I have received to keep tr.im alive.

We have answered those pleas. Nambu will keep tr.im operating going forward, indefinitely, while we continue to consider our options in regards to tr.im's future.

There's more on their blog.

Shows the danger of relying on URL shorteners I guess ... Oh well, I better choose a new one as I always used tr.im. And I've lost all my stats .

The full message reads:

tr.im is now in the process of discontinuing service, effective immediately.

Statistics can no longer be considered reliable, or reliably available going forward.
However, all tr.im links will continue to redirect, and will do so until at least December 31, 2009.
Your tweets with tr.im URLs in them will not be affected.

We regret that it came to this, but all of our efforts to avoid it failed.
No business we approached wanted to purchase tr.im for even a minor amount.

There is no way for us to monetize URL shortening -- users won't pay for it -- and we just can't
justify further devleopment since Twitter has all but annointed bit.ly the market winner.
There is simply no point for us to continue operating tr.im, and pay for its upkeep.

We apologize for the disruption and inconvenience this may cause you.

For instance, I've shortened the URL for http://www.malcolmcoles.co.uk/blog/external-links-9-stages-of-linking-out-denial/ to http://tinyurl.com/c8bp5d instead (25 characters instead of 92).

But which URL shortener service is best?

Use this URL shortener list to decide ... It shows sites I've observed to be popular on Twitter, ordered by the length of the URL generated. I reckon tr.im is the winner. Although they all seem fairly good.

What the headings mean

• URL length shows how many characters (including the http:// at the front) the shortened URL generated for this site's homepage was. The first figure is the base length (EG http://tr.im/ is 13 characters), the second number is the short code generated (this can vary from 4 to 6 characters at most services - popular services have used up all the 4-character ones already - so you might expect tr.im to change to 13+5 if this post is very popular!), and the final number is the total.
• Tracking / statistics shows whether there you can see figures for how many people have clicked on your shortened URL (EG if you used it on Twitter). You have to register to get these figures.
• Custom name - whether you can choose your own memorable short-code or not (rather than the random string of letters automatically generated).
• Post direct to Twitter - can you post to Twitter from the website of the service? (Although they all have plugins or extensions to let you use their services direct from your browser whichever site you are on.)

Even shorter still?

There is also the tinyarro.ws services, mentioned in the comments below. It uses unicode characters to make URLs shorter still - it made my homepage into just 13 characters. Although you might want to read the comments here - does anyone have any experience of it ...?