Here's how AirDrop in iOS 7 works [Video]
Apple has added new AirDrop functionality to iOS7, a desperately needed function that allows users to share files easily between devices. AirDrop requires both Bluetooth and Wi-Fi to be enabled, it doesn’t require you to be connected to a Wi-Fi network. This allows for true peer-to-peer sharing via Bluetooth.
Users can limit AirDrop connectivity to contacts, open it up to everyone, or disable AirDrop altogether as well.
Here is a nice walk-through video from idownloadblog:
Connectivity and file transfer appeared to be fast, efficient, and extremely simple in my hands-on test with the feature. I think that this is a feature that a lot of people aren’t really appreciating just due to the fact that most don’t have multiple iOS 7 devices available to use it in a real world scenario.