I recently got linked to this and thought I should share the fun. Sculptris is basically a very tiny (2 mb) downloadable application about messing with a lump of virtual clay. It's in a very early development state but still boasts an interesting number of tools to work with, a bunch of different materials for your model and on top of all a very low learning curve. You can pretty much create a crude clay-goatse in only a few minutes!
You can download the application here:
http://drpetter.se/project_sculpt.html