In a word- yes. I totally called BS when I heard about this as most people do. However, after a friend convinced me about its truth (he has the ipod to prove it) i did a little searching via google. By simply typing in "free ipods" i came up with the below article from engaget.com:
So Gratis Networks has set up a site called FreeiPods.com that is giving away your choice of an iPod mini, a 15GB iPod, or a $250 gift certificate to the iTunes Music Store. All you have to do is sign up, click on one of their offers, and then convince five other people to do the same. We smelled a scam in there somewhere, or possibly scamola, and since our whiny emails to the company asking them to explain how exactly this worked went unanswered, we decided to just call them up to try and sort things out.
The company rep we spoke to insisted that this thing was for real and that they had already given away about 400 iPods to people. To get it to work you actually have to sign up for one of their sponsors’ offers (like the Columbia House DVD club, the GM credit card, AOL for Broadband, etc.) and also get five other people to also take them up on one of their offers. Gratis Networks picks up a decent referral fee for every one that’s completed, and since it’s a lot harder than it sounds to also get five of your friends to sign up for AOL (for example), they only have to ship out free iPods to a relatively small percentage of people, while simply pocketing the cash for anyone who is able to only get four people or fewer to sign up (the company rep admitted that they lose money whenever someone gets five people to complete orders, since it means they have to ship out an iPod). Anyway, if you’ve got five friends you can convince to do this who also think they each have five friends they can convince to do this, you might just find yourself just maybe getting a free iPod.