Just to clarify, this offer is absolutely, 100% free, no questions asked.
The idea was that most students can get open-source web based solutions like Apache and MySQL for next to nothing or free, however Windows hosting is so expensive, it is out of students depths to afford it. This web hosting can be used for anything (legal and within the terms of conditions of WebFusion's policy), but designed for those who know more Microsoft-oriented code like .NET and ASP.
All you need to qualify is a promotional code and an .ac.ukemail address. However to get the promotional code, head over to Ed Dunhill's blog and leave a comment on the post, or if you want to remain private, fire off an email to him - but make sure you use your University email address in the appropriate box. Once you receive your code, and it may take a day or so as he has to send them out manually, head over to the WebFusion pages and get started.
Update: something I should have put in the original post - the Channel 8 users are complaining, mostly because it isn't available outside the UK. Having said that, maybe some other Microsofties can put in a good word for other geographic areas.