An unpaid internship is a clear-cut case of Career Purgatory,working for no pay, and an unknown future outcome. If some court recent court decisions stick, unpaid internships may be going away.
In what is shaping up to be one of those footnote court cases you read about in your text books a court ruled that unpaid interns on the Black Swan movie were actually doing the work of paid interns. The ruling is certainly shaping up to create waves in how student interns are treated.
In an overly simplistic view to of what it takes to qualify as an unpaid internship the role the internship must benefit the worker(s), be part of a formal job training program, not benefit the company, and not replace an actual paid employees role.
For any students wondering what the Department of Labor has to say about being paid you can read their fact sheet here.