I know there is a post below about this. I cross-posted this to the OOT forum as well. According to the links below this seems legit.
http://www.gearlive.com/archives/2004/07/freeipodscom_is.html
http://www.geocities.com/ghettopia/johnstory.htm
http://forums.pcper.com/showthread.php?p=2961455
Seem that this pyramid scheme is (at least as of now) working and giving away IPODs.
Basically you need to sign up using a referral links and complete one of their "Offers". These include things such as signing up for a free trial of something, or the easiest one, is to sign up for ebay and place 1 bid. You must also get 5 of your friends to sign up under your referral link and complete their offers. Then you get your ipod!
Worth a shot since it can be completed for free. I signed up for ebay (again) with a new email adress (use a non-free email adress and you don't even need to verify your ebay account with a credit card) and placed a bid for a playstation game, and got imediately outbid. Easy enough.
I figure worst case I get some spam in an email account (not like spam can get any worse). And best case a free IPOD. So anyway, thought I would pass it along and try to get my 5 referrals at the same time.
My referral link:
http://www.freeiPods.com/default.aspx?referer=7735147