I'm sure you've heard of the SXSW music festival that happens each March in Austin, TX. These are my pics for the best of the free music from SXSW 2010 (more info below).
If you're willing to really hunt for it, you'll find a ton of free music on the SXSW site. Luckily, there's a easier way to find it all thanks to the unofficial SXSW torrent site. Check it out here, but be warned... we're talking about a lot of free music. They've packed over a thousand songs from this year's SXSW into two torrents, but the vast majority of it is crap. There are a few gems to be found though, so if you have the time to plow through it all, it's worth it.
I think it was worth it for that Joe Pug song alone! That really blew my mind. I'm definitely going to have to look into more of his stuff.