If you don't pay interns they the only interns you'll get are upper-class kids who can afford to work for free. That's fine if all you want is short-term cheap labor, but if you're using internships as part of the recruiting process for full-time positions then you'll miss many of the best candidates.

don't be cheap. either pay some, or give some equity. I know the job market sucks, but great students have jobs for sure.

I've always run my startups very cheaply. Then again, I haven't had many interns either :). So point taken.