Things have changed since this question was originally asked and answered. There’s been a large amount of work done on getting cross-browser font embedding for body text to work using @font-face embedding.
Paul Irish put together Bulletproof @font-face syntax combining attempts from multiple other people. If you actually go through the entire article (not just the top) it allows a single @font-face statement to cover IE, Firefox, Safari, Opera, Chrome and possibly others. Basically this can feed out OTF, EOT, SVG and WOFF in ways that don’t break anything.
Snipped from his article:
@font-face {
font-family: 'Graublau Web';
src: url('GraublauWeb.eot');
src: local('Graublau Web Regular'), local('Graublau Web'),
url("GraublauWeb.woff") format("woff"),
url("GraublauWeb.otf") format("opentype"),
url("GraublauWeb.svg#grablau") format("svg");
}
Working from that base, Font Squirrel put together a variety of useful tools including the @font-face Generator which allows you to upload a TTF or OTF file and get auto-converted font files for the other types, along with pre-built CSS and a demo HTML page. Font Squirrel also has Hundreds of @font-face kits.
Soma Design also put together the FontFriend Bookmarklet, which redefines fonts on a page on the fly so you can try things out. It includes drag-and-drop @font-face support in FireFox 3.6+.
More recently, Google has started to provide the Google Web Fonts, an assortment of fonts available under an Open Source license and served from Google’s servers.
License Restrictions
Finally, WebFonts.info has put together a nice wiki’d list of Fonts available for @font-face embedding based on licenses. It doesn’t claim to be an exhaustive list, but fonts on it should be available (possibly with conditions such as an attribution in the CSS file) for embedding/linking. It’s important to read the licenses, because there are some limitations that aren’t pushed forward obviously on the font downloads.