LOLL is a huge bookmark file that Irwin and Willard add to by evaluating visitor-submitted sites and by scouring the Web themselves. The team uses a cool little program called bk2site, which takes a Netscape bookmark file and transforms it into a "Yahoo-like" Web site, including a news blog.
Basically, all Irwin and Willard have to do is grab bookmarks, annotate them, and run bk2site. The links are classified via topics like advocacy, audio/video, commercial sites, news, and programming. The front page displays the last ten links added to the bookmark file along with a link to the last 100 links added.
As you drill down in the individual topics, you'll see that the pages really do look a bit like Yahoo, with sub-topics listed at the top and the number of each in parentheses. Newly-linked-to sites have an icon denoting them as such, and each link has a magnifying glass icon that links to Google's "related pages."
If the page maintainers think a particular link is especially noteworthy, they add a thumbs-up icon, and the ubercool places get sunglasses. One thing I'd like to see on the site is a page that lists only these top sites. It'd be a great way to cherry-pick if I wasn't looking for something specific.
Irwin and Willard have placed the bookmark file and the scripts they use to generate the LOLL page in a CVS repository so anyone can take a look or just take it. If you don't want to get that complicated, you can just pick up the RSS feed for your site.
I poked around trying to find dead links, but didn't encounter any -- the site looks pretty clean. Of course, if the Sourceforge.net server had been faster the day I was checking LOLL, I'd have looked harder. Your mileage may vary.