example - you put down a link somewhere in your HTML or blog post. the script then converts it to yoursite.com/jk9d9s , automatically, so that you don't have to go through some kind of dashboard every time you want to create a link that redirects.
I know its possible to use .htaccess to redirect links... so maybe if the PHP can access .htaccess and insert a redirect for every link it detects in the HTML? It would need to come up with a string of characters each time, and make sure that no set of random characters has already been used.
Twitter is one example of a website that already does this. Any URL on that site submitted by a user is converted to t.co/ (and what its redirected to shows up as the text for the link).