The Department of Labor has a smell test for them: http://www.dol.gov/whd/regs/compliance/whdfs71.htm
According to those regulations posted we see that a business can't legally have an unpaid intern to keep costs down. The pros for an unpaid intern would be; 'Intern gets experience,' and 'business has potential future employee.' Whereas the pros for a paid intern would be; 'Intern gets experience plus compensation,' and 'business gets profitable labor, and has potential future employee.'
1. The internship, even though it includes actual operation of the facilities of the employer, is similar to
training which would be given in an educational environment;
2. The internship experience is for the benefit of the intern;
3. The intern does not displace regular employees, but works under close supervision of existing staff;
4. The employer that provides the training derives no immediate advantage from the activities of the intern;
and on occasion its operations may actually be impeded;
5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship."
Source: [pdf] http://www.google.com/url?sa=t&source=web&cd=1&v...
The guy was talking about working at a rail yard. At the end of the day, train cars were driven back into the yard for maintenance and/or storage. Interns were not allowed to do that, since it benefited the company. So the cars had to be moved back into the yard, then one or two were taking back out so interns could drive them back.
Kind of odd, I know.