Harvard had an internal facebook system that had pictures and brief descriptions of students. Via your dorm network, you could browse the other freshmen in your dorm.

Zuckerberg went and jacked into each dorm and downloaded all the data. Then, he put the pictures up on a site called Facemash. When you went to Facemash, you were given two pictures and asked to rate which one was hotter. This quickly became very popular and got Zuckerberg in trouble with Harvard.

He used the negative publicity (but remember that there's almost no such thing as bad publicity) to launch Facebook. From there, it's a case study in viral marketing, as Zuckerberg launched at the schools that had the most students that were friends with the Harvard students.