The most wide-spread use of font embedding on the web is found in Flash. You see Flash files all the time and may not even know they're flash. For example, my home page is Flash.
The fonts on this page are embedded in the Flash file itself. Flash is exceptionally efficient in its font embedding, with each font taking just a few K.
Flash is also vector-based (meaning it uses curves instead of dots), so you can have large fonts that download almost instantly, and you can animate your type and still keep small files.
Flash even allows you to use embedded fonts in text boxes that pull text from simple HTML files.
Flash can be seen by over 90% of web viewers on all platforms. It's fast and efficient and very popular with good reason.
Why wouldn't you use it? First, Flash files can be hard
to make. Flash is a complex program and takes a long time to learn. And Flash pages aren't text-based, so they're not always indexed by web search engines, users cannot always copy and paste text, etc.
Glyphgate for server-side font embedding
A technology called Glyphgate embeds fonts from the server, and can be used without any special software for visitors. Or, if the user downloads a small program, it can more efficiently download fonts and display them in your browser.
Using graphics, or the plug-in, this web server extension makes it possible to show text with any formatting of any language in all browsers on all platforms.
This all means that you may format web pages with any fonts and text of any language and be sure that it turns out as intended in all browsers and on all platforms.
The problem is that pages can insistently ask for the plug-in, even once it's installed in IE, which can be
annoying. If you choose to view the fonts as graphics, it's slow to download precisely because they are all graphics.
While this may be useful in some situations, it's yet to prove itself as a transparent font-embedding solution. Flash is more universal.
I hope that someday browsers have secure built-in font embedding. Hope this for could come from the Mozilla/Firefox open source developers--if anybody
decides it's important enough to develop.
Personally, I find it amazing, that browser developers have ignored fonts as much as they have. I find it even more shocking if not downright pathetic that designers have allowed them to get away with it.