drostie: this is the most accessible plain-English explanation of rainbow tables I've ever seen, and it's short to boot. From now on, whenever anyone asks me how stolen lists of hashed passwords get hacked, I will point them to your comment. Thank you.
Of course a lot of hashed passwords have been hacked not because of rainbow tables, but by brute force because the site used a single round of a fast hash function.
They think they are good with a 4-byte salt and one round of sha-1, since that is effectively immune to rainbow-table attacks, but its' not immune to "I have a massively powerful processor in my computer called a 'video card'"
It's good. I wrote my own rainbow table code several years ago, and I had to read and re-read white papers and wikipedia articles for several days until it finally clicked. This would have helped a lot.