Created in response to the Soviet launch of Sputnik, the Defense Advanced Research Projects Agency (DARPA) has done some pretty wondrous things as a result of its efforts to "formulate and execute R&D projects that would expand the frontiers of technology beyond the immediate and specific requirements of the Military Services and their laboratories".
From today's New York Times feature on DARPA's new director:
The Defense Advanced Research Projects Agency is different from other federal agencies. For one thing, the agency, known as Darpa, created the Internet (really). For another, it is probably the only agency ever to offer a $40,000 prize for a balloon hunt, a contest that was inspired by Regina Dugan, a 47-year-old expert in mine detection, who took over last summer as its director.
Aside from a number of military innovations such as the Air Force F-117 Stealth Fighter, unmanned aerial drones, and the M16 assault rifle, DARPA is also responsible for a surprising number of innovations that have proven to be gamechangers, even in times of peace.
In addition to the Internet, (which is tough to top), DARPA is responsible for the global positioning satellite system (GPS). In other words, thank DARPA for your handy iPhone.