I’m interested in what everyone else has to say as well.
To expand on my previous comments, there are a few benefits for the company. If they are short on budget, this can be a good way to get a talented person they don’t want to pass up in the door while keeping the personnel budget down for a few months until they can get approval for a full time position. It also obviously gives them a chance to try out a person they might be on the fence about with relatively no risk. The pitfalls for the company are that the individual has no real responsibility t the company and can leverage their experience to get a better job quickly. I don’t talk about it much but I was an onsite freelance to a small firm right out of school. They pretty much used me for cheap labor for a few months and I used them to build experience to get a great full time job at Evo Design. Still, they seemed surprised when I left…
The are a few benefits to the employee including getting the experience I mentioned above and trying out a work place. The risks are if you have to move to make this post grad internship work, it may not turn into a permanent gig and you could be left holding the bag in a far away place. Not to mention the fact you won’t be getting benefits like health care… the key is to get them to convert it as fast as possible to full time employment and to renegotiate salary based on your new market value with this newly minted experience.