I have talked about using picture style in the past but I think this video explains the whole thing much better than I ever could. If you visit the Vimeo page, you will see a list of presets to download for both 5D and 7D.
The title of the clip is a bit misleading: the camera still has the same dynamic range, it just moves the extremes values toward the mid tones so nothing get clipped. Still, the end result is the appearance of a wider dynamic range once you are in post since you can push the color much further. This is what people mean when they say that you should shoot ‘flat’.
There is a big debate at cinema5D about if you should shoot flat and grade in post or shoot with the desired effect. I am more of a shoot flat and fix color in post kind of guy because it allows me to change my mind as many times as I want regarding the style I want to use. But by shoot directly with the intended look, you (1) save time in post and (2) possibly end up with a better end result since all the information stored in the file is actually the information you want.