Launchers--utilities that let you quickly find and open apps, files, and other things with a few keystrokes--have a Goldilocks problem.
Some--including Butler, Launchbar, and Quicksilver--are too complex for many users. They're incredibly powerful, capable of initiating almost any action your Mac can perform. But with that power comes confusion; getting the most out of them requires diving into some of the scariest configuration screens you'll ever see on a Mac.
At the other end of the spectrum, you've got OS X's own Spotlight, which may not be quite enough. Spotlight will find, and let you open, files (or apps or iCal events or Mail messages or whatever else you've told it to find), but that's about it--while it's certainly easier to configure than a full-fledged launcher, you can't tailor it very much.
What if you want something in between Spotlight and these do-everything utilities? Alfred is, for me, Just Right. It can do a lot more than Spotlight, but it doesn't overwhelm you with options or intimidate you with complexity. (It's worth noting that Alfred uses OS X's own Spotlight database for searches; Butler, LaunchBar, and their ilk build and maintain indexes of their own. This is one reason Alfred is simpler to use, but a bit less powerful.)
As with other launchers, you invoke Alfred with a keyboard shortcut (in my case, Option+Spacebar), and up pops a simple text-entry field. You then type in a few letters--ex to open Excel, for example. Whatever characters you type, Alfred presents a short list of possible hits (you specify, in Alfred's preferences, just how many possibles are displayed). You simply press Return to launch the first result, or use the arrow keys to select one of the others. Conveniently, you can press keyboard shortcuts--Command+2, Command+3, and so on--to access other results directly.
(If you've ever used another launcher utility, one Alfred peculiarity that could trip you up is that in order to find a file, as opposed to an application, you must type a special string--either ' or fi--before the file's name. In other launchers, that extra string isn't necessary.)
Nice little touches abound in Alfred. You can, for example, access an application's recently used documents by using Alfred to find the program and then pressing the right arrow and selecting Recent Documents. Alfred can also locate Mail messages, Address Book contacts, iCal calendar entries, Safari bookmarks, and a few other specific types of data. You can also tell Alfred to include or exclude specific data types, and to exclude specific folders and their contents, from its results. And if you open a particular file or program frequently, you can create a direct keyboard shortcut for that item by simply adding the key combination to the item's Spotlight comments field--one advantage of Alfred using your Mac's Spotlight database for searches.
In addition to finding and opening things on your Mac, Alfred can help you find information on the Web. Alfred comes with built-in shortcuts for searching Google (and all its sundry products, including Gmail and Google Docs) as well as Twitter, Facebook, YouTube, and several others; you can customize those shortcuts and even add new search engines. You can also use Alfred to initiate some system actions, such as starting the screensaver and emptying the Trash; and Alfred can perform basic math calculations (as well as slightly advanced ones using functions from the GCMathParser).
While Alfred itself is currently free, an $18 Powerpack add-on provides a bit more functionality, including multiple Clipboards and the capability to quickly create e-mail messages, manage files, and control iTunes from within Alfred. The file-manager feature is particularly nifty: Press Option+Command+/ and Alfred will display the contents of the folder you most recently browsed from within Alfred. Drill down from there to find the file you want, and then press Option+Command+\ to select from a menu of actions: Open, E-mail, Delete, and so on.
The bottom line: If you're taking full advantage of everything that Butler, Launchbar, or Quicksilver has to offer, there's no need to switch to Alfred. But if you want a keyboard-based launcher and don't need all the power (or complexity) of those three, Alfred is an excellent alternative. It can handle the most common launcher tasks, with a clean, simple interface; it's a pleasure to use.
(Alfred is currently at version 0.8--the developer brought it out of beta so it could be included in the Mac App Store immediately, rather than waiting for a few forthcoming features to be finalized. So Alfred is ready now, and will be even better soon.)