I know, it sounds like a scam. So I did some research, and I found this two articles: http://www.geek.com/news/geeknews/2004Aug/gee20040819026544.htm and http://www3.netmart.com/free-ipod.htm. Both of the articles say that this particular site has been around for a while, and actually is legit.
If you guys do decided to get one, it's pretty easy. Just register on the site, then choose one of the offered free trials (I would personally suggest the RealArcade trial, because Real/RealPlayer is an authentic and reliable company/program. Not only is it free, but I immediately ended my trial after beginning it). After that, just get five other people to register and you should get an iPod.
Have a good day guys.