I second this. Part of my assignments the final semester of college was to intern in an IT related business. With no previous contact, I was able to get an internship paying a bit more than minimum wage.

It was invaluable experience. Not to mention that once the internship was over I had a great job just waiting for me to say yes. :-)

The way this is phrased seems to imply that the person doing the work is doing something illegal. I believe that only the employer is violating the law in this case.

It's an important distinction: if you feel the arrangement is in your interest, the illegality is the employer's problem, not yours. That said, if you can actually produce working code, your time is valuable and you should not work for a for-profit business without appropriate compensation.

Working for free is a great way to build your portfolio of projects and get some "experience" to put on your resume. Go find a startup or small business and basically tell them you can build stuff for them for free for a month. After that period, if they like you then they need to hire you full-time.

However, I do agree there is a fine line between doing this for portfolio/resume building and being used for bitch work.