Although these dwarf URLs make it difficult to mouse over a link to see the exact destination, if you suspect that a TinyURL link you've received might be hiding a malicious URL, you can check it out without clicking the link.
"The popularity of TinyURL provides fraudsters with a golden opportunity to exploit the service. Attackers can take advantage of the system to make phishing URLs less suspicious to anti-phishing detection, since the shortened form of the phishing URLs will be totally unrelated to the targeted brands/websites. In a phishing scenario, this service is problematic to the recipients of phishing emails because this makes it difficult to mouse over a link and see exactly where it's going."