For those who haven't heard of it before, its based on the same ideas behind recaptcha (the words you get on those things are actually words from books that are being transcribed to digital, one word from each pair is a word that the software wasn't able to read properly, so every time you do one of them, you're helping to transcribe a book), instead of paying to learn a language, other companies pay Duloingo to have websites and books translated, and thats where the lessons are taken from, the idea is that as you learn, you're helping to translate the internet.
http://www.youtube.com/watch?v=cQl6jUjFjp4