Free Dining is a promotion, which is usually offered in early April for the time frame of late August to early October.
If you decide to buy a package at rack rate at a Disney Resort Hotel and book at least a one day ticket, you will receive the Dining Plan for free. Means you get 1 TS, 1 CS and 1 snack per person per night for free. We did it in Aug 07 and Aug 08 (saved 1450$ in 12 days!! in 08 - 2 adults) and are already booked on the bounceback free dining for Sept 09 (bounceback means future stay promotion, which you have to book while it is offered and while you are staying on property)