Since I started reading ebooks last summer, I've acquired roughly 700 ebooks — I have about 450 in my Barnes & Noble library, and around 250 that I've gotten from other sources (Kobo, Sony, Copia, etc.). The vast majority of these have been free ebooks, usually limited-time promotions from the author or publisher.
Typically promotional freebies aren't available for long, so I usually check my sources every day, first thing in the morning before I get to work. Sometimes I check again later in the day, too. There is the occasional promotional freebie that is only available for a day or even just a few hours, and I don't want to miss out! I also tend to download any freebie that I think I might be interested in — I can always decide I'm not and delete it later, but generally if you don't get it while it's available, you're out of luck.
So where do I get most of my free ebooks? Here are a few of my favorite sources:
The free ebooks thread on B&N's forums — There are some devoted forum members who update this every day, so it's worth checking regularly!
Books on the Knob — Although the blogger's main focus seems to be Kindle books, she also provides links for free books available on other sites, such as B&N, Sony, Kobo, Smashwords, etc.
Smashwords — This is a site for indie authors and small publishers to sell their ebooks, but there is also a pretty extensive list of freebies, and they occasionally have coupons and sales as well (such as during Read an eBook Week).
Girlebooks — This ebook publisher has a nice selection of free classics. The advantage over Project Gutenberg (see below) is that they have covers!
Project Gutenberg — This is probably your best source for free classics and other ebooks that are in the public domain. They don't have covers or metadata, but you can add those yourself in a program such as Calibre.
There are probably other sources for free ebooks, but these are the ones that I use most often. If you have a source for LEGAL free ebooks, let us know in the comments, but be warned that I will not post links to anything that appears to be spammy or that offers pirated ebooks.