When a user registers to Mugshot he can also enter his username for a bunch of services, including his own blog, facebook, myspace, flickr, linkedin, youtube, rhapsody, last.mf, del.icio.us, twitter, digg and reddit. Via future plugins, more services can be added.
When another Mugshot user becomes a "friend" (or in the mugshot terminology, he becomes a "follower") of the first user, then he/she can follow his digital life. Via a desktop application or the online front end, you will be able to view the digg stories your friend dugg, youtube videos posted, music listened etc. You get the point.
Additionally, within the Mugshot universe you can create a "group" of some specific topic and either attach an RSS feed to them, or publish URLs that are on topic and up for discussion between the group's followers and admins.
Mugshot is basically a utility to shortcut your way through many friends and many services. It can in fact prove an extremely useful utility, if many of your friends already have a Mugshot account, but most importantly, if the data of these sites are open for grabs and reuse for free. In fact, Pennington wrote a few months ago that the freedom of personal data are more important than Free source code.
One change I could suggest so far is that the Mugshot application sitting in the notification area should not load items that are about me, because this has resulted in a lot of "spam". Basically, I get notifications of things I do myself; notifications I don't need because I know what I did online already...
Mugshot is currently in beta, but I have 5 invites left (email me if you want an account). I guess, time will tell how the Mugshot gamble(?) will play out. One thing is for sure; third parties must play nice too.