According to a New York Times Article written last Friday, most unpaid internships are illegal. (This article is worth reading, especially since it'll go into the details much better than I will even attempt to.
This being said, all the internships I have done have been unpaid and I am currently in an unpaid internship right now and I can say easily that there are things that make them worthwhile and things that don't. Having discussed this with several of my peers, we have all come to the conclusion that internships have strayed far from the path they were originally on, most now having their interns go out and get coffee or answer phones; all menial tasks. I have experienced this easily in past internships and even now in my current internship I occasionally experience it.
At the same time, however, I still believe that, especially in my field, it's vital to have such internships (because there are few, if any, paid internships) because the mere networking opportunities are, in and of themselves, valuable. I was fortunate to make one of those connections through my current internship, though it is difficult to make those connections in all internships; my previous internship I made no valuable connections, so in my opinion, unpaid internships are a shot in the dark in terms of good or bad. Sure, I'd like to make money doing what I do, but the way I see it, no one else is hiring and it's always better to do something than nothing.
I would love to hear opinions on this though.