This offer is limited to a selection of only 20 titles, but as you can see from this list B&N is including a number of tempting titles. You could get The Hunger Games trilogy, The Hobbit, a title from the Diary of a Wimpy Kid series, Life of Pi, and more.
After choosing the paid and free ebooks, and buying them at the register, the customer will be asked to provide a couple email addresses (one for each ebook). The recipient of the free ebook will need a Nook account, of course, but if they don't yet have one the gift-giver can ask for a code which the recipient can redeem online.
For more details on how to claim the free ebook, click here or go visit your local B&N store.
B&N has been offering similar free ebook deals ever since just after they launched the Nook Store. The early promotion was called More in Store and it included free ebooks which could be downloaded in store as well as reading other titles in store (for up to one hour). That program seems to have fallen by the wayside in early 2011, and it was replaced by Free Fridays, a similar program which offered a free title each Friday.
This is an interesting offer, is it not? It quite cleverly avoids the one minor issue with B&N's other free and discount ebook promotions (like the 101 Nookbooks under $3 going on right now). Namely, this is a sales offer which will be difficult for Amazon to match. Declaring online that you're giving a particular ebook away in stores is all the detail Amazon would need to drop the price of the copy they sell, thus depriving B&N of the value gained from an exclusive sale.
But with this current offer the actual deal takes place in store, out of sight, and given the way the BOGO is structured it would seem likely that Amazon will not be able punish participating publishers by dropping the price of the related Kindle Edition.
Or at the very least, I have not seen Amazon change any prices yet. The deal is only a few hours old, so they could still be planning a response.