Pasting text back into another web form via the PASTE bookmarklet is easy—after tapping it, a green box labelled PASTE HERE is overlaid onto any open form field. Tapping that drops in your clipboard's contents, preserving any HTML that was there if the form supports it.
But, of course, there are some drawbacks. While pasting to and from different Safari windows and emails covers a lot of one's copying and pasting needs, it's not anywhere close to the convenience a system-wide solution would bring. You still can't paste the URL to the cute kitten photo you're looking at onto your Wall via the Facebook app, for instance. For things like this, being able to access Safari's URL bar would be nice, since natively, you can only export your current URL via Mail.
Also, the free version inserts a small one-line ad for Pastebud; $US5 turns this off, and also eliminates the popup that appears whenever you paste. $US5 isn't too bad though, for something that's ultimately pretty convenient. If you're betting on Apple's year-plus delay on coming up with a copy and paste solution carrying on, it's not a bad investment. Check out Lifehacker as well for more impressions: [Pastebud, Lifehacker]