Z-4190 bubble shield

The Bubble Shield, otherwise known as Shield Grenade, is a United Nations Space Command defensive device.

Mechanics
On top of the device is a safety cover, which can be flipped up to expose the red activation button. After that, it emits a charging sound and upon resting on the ground for a short time, creates the shield. The shield itself is a Buckminster Fuller sphere made of tessellating hexagons.

Appearances
It was first seen in the Halo 3 "Starry Night" CGI Trailer. Since Bungie stated that all assets in the commercial were produced by them, it is safe to say this device will show up in the game. Frankie has said that the shield is ONI tech.

Speculation
When the staff of EGM magazine played a Halo 3 multiplayer beta, they mentioned that the "x" button had no function. One of the Bungie staff asked to another, "How many times did you press X?" and the other answered "Like 40 times, I wish this was activated." Maybe the shield is enabled by the X button.

It is speculated that with the introduction of the Spartan Laser which is a super weapon by definition, the gameplay may be one sided in multiplayer, so a super defensive option was introduced to balance the gameplay.

Frankie stated that the shield grenade is not necessarily a grenade. This could mean that you can activate it, pick it up again, wait for it to recharge and use it again. It also might have a time limit or a specific amount of damage it can take before it deactivates. It could also simply be a one-handed weapon with one use. This could also mean it doesn't blow up like a grenade would.

Considering humanity's current level of technology, it seems quite possible that as with the MJOLNIR shield system, this was created by reverse-engineering Covenant shield technology. It has been confirmed, however, that the shield grenade is human technology.

Interestingly, the shield does not actually emanate from the grenade. It comes from the Chief's armor, suggesting that the grenade is some sort of power relay or converter.

EDIT: It appears to me that the shield begins in the ground near the point where Chief threw the grenade into the ground, so I think that it actually is the grenade creating the shield, not the armor. - Annun Cirith

RESPONSE TO EDIT: Given the footage provided in the video, the shield does appear to emanate from the Chief's armor, as the shield does have him as its central focus. While the significance of that may be debatable, under cinematic purposes, it would make sense for the Shield Grenade to be some kind of power relay system that temporarily augments the Master Chief's shields, rather than having a Shield Grenade that creates a perfectly spherical protection system around something other than itself - Harold Opacus