I found out today, in my interview, that paid internships are much better than unpaid.  I asked the recruiter why this was so, other than for monetary benefits; he basically said something along the lines of… When companies look over applicants and they see someone who worked a non-paid internship, they think of the work that they did as go fetch this, and be my slave type position.  If they see someone who worked a paid internship, they generally think that the person did actual work, and worked directly on products, etc…