I'm not a huge fan of free web design stuff, mostly because its either hard to modify, or low quality, or if you can tailor it to your needs, you can probably do whatever you need yourself. I also prefer not to use others' designs since it takes away my sense of identity, but in some cases I'm willing to be more flexible, like in the case of LogoInstant.com.
They offer 25 designs right now, not a big deal quantity-wise, but the designs are extremely good and nice and web 2.0 in a good way. You also get layered PSD files, which means you can modify these images easily (and freely). Plus, they say new ones will be added periodically, which seems to be true, since earlier today when I checked they only had 23 designs I think (a new page was definitely added).
As a web designer I hate using pre-fabricated termplates, but I have to say this is an exception and I'll be looking into some logos for my own stuff, it's rare that you get such high quality in this area of the open source market, enjoy!
Logo Instant is still offering its services on the Internet. The free logo collection has increased in the past years and has grown to more than 60. Each logo can be downloaded free of charge to the local computer. They come as compressed files that include both psd and ai files, so that you can load them in your favorite image editing tool to modify them to your needs. At the very least, you may want to change the name shown on the logo to your business or website's name.
The majority of logos offered by Logo Instant have a size of about 2 Megabytes in compressed form. The resulting images that you need to create separately on the other hand are usually a lot smaller than that.