The engineering problem of energy storage is very important for making things like Electric Cars and efficient green architecture, etc. Normally you immediately think of batteries. The problem, however, is that batteries are heavy, sensitive to temperature, and require maintenance. Enter the concept of Flywheel Energy Storage.
Now, this is actually a very old idea. My dad has several antique industrial/farm engines that are designed to get a large steel flywheel spinning at a target RPM. The engines then only use fuel to maintain that RPM. As the load on the flywheel increases (that is, as energy is taken out of the wheel) the engine kicks in to compensate. It's a very efficient, simple system.
Now, flash forward to 2009 and the need to be able to store large amounts of energy. Say you need to provide an uninterruptible power supply (UPS) to a hospital or data centre. You might immediately imagine a large diesel engine hooked up to a generator, and then a bunch of (DC) batteries that provide electrical power while the engine gets up to speed in the event of a power failure. But in larger applications (say, when you need to provide 4 Megawatts!), the batteries necessary take up far more room and require much more maintenance than a comparable flywheel system.
So here is a real-world example, the Hitec UPS...
Note how there are actually two different fly wheels going, one that maintains a constant RPM (and is connected to the generator) and one that spins three times faster to store energy necessary to keep the other rotor spinning when no new energy is being put into the system (in other words, in the time between loss of power and the diesel engine firing up).
Another real-world application--transient energy. Imagine that you need to produce brief, extremely high electrical currents for testing circuit breakers. Simply wiring these into the grid and shorting them out would cause a great deal of stress on the utility system. Storing the energy onsite in batteries would take a lot of space and hassle. Instead, you could have a giant flywheel with a motor on one side and a generator on the other. The motor may take several minutes to spin up the fly wheel, but then the energy could be released on the other side in a fraction of a second--effectively making the flywheel into a capacitor.
Can it be used in a house? Sure. Electricity generated from say, photocells, would be used to spin up a flywheel. Then that energy could be drawn off to run the house electricity. Can it be use in a car? Yes. There was at least one proof-of-concept type vehicle made with a drivetrain that used a device like this. And it has been used in race cars to recover energy from breaking. But one of the key issues to be resolved in the gyroscopic effects of having such a large, spinning mass!