The offer is legitimate and was featured on CNN.
The company does give out "free" Ipods. You can get a 20GB or one of the mini-ipods. Unfortunately the way it work is very simular to a ponzi scheme. You sign up at the website, and are presented with a selection of offers which you must select one. Then here is the annoying part... you must find five other people to also join. The good news however is that unlike a ponzi scheme you don't have to actually pay for anything... you just have to annoy other people.
I hate bothering folks with deals like this, however a 20 GB ipod is certainly worth annoying a few folks.
My Referal Link
Currently listed offers (I chose the Blockbuster one):