Distributed Computing, sometimes called Grid Computing, uses the combined processing power of many individual, geographically separate computers to solve large computing problems. Here are three examples of community distributed computing projects.
Folding@Home is a great example of using distributed computing techniques. In order to design better treatments for many common cancers and diseases such as Alzheimer's and Parkinson's, Stanford scientists are studying how proteins 'fold' and 'misfold'. Unfortunately these biological simulations take a lot of computing power - more than is available to the scientists. To solve this problem they started the Folding@Home project - by downloading a small program you can have your computer perform calculations on one of these folding projects using 'spare' processor time. So far over 150,000 computers are involved in the project, bringing much more computational power than would be available in one location. Rosetta@Home is a similar project that aims to determine the 3D shapes of proteins.
Another example of a distributed computing project is SETI@Home. The Search for Extraterrestrial Intelligence collects huge amounts of data from radio telescopes scanning the skies, and uses distributed computing power to look for patterns in that data which may indicate signals generated by an intelligent species.
Finally, ClimatePrediction.net bills itself as the 'world's largest climate modelling experiment'. Users running the climateprediction.net software help compute climate predictions for the next century, including temperature and rainfall data.