looks like it was either custom made or adapted from another theme, but to be honest it looks terrible anyway
i'm more interested in the way the ads are put, they give that way more money to the webmaster by tricking the visitor to click the image
If you had a similar theme, using post images the same size as the ads (eg 250 x 250, 300 x 250) it would be a fairly straightforward customisation to make. You could edit the theme to insert an ad after every third/fourth... post in the listing. Depending on your level of experience with wordpress, you could probably find someone on here to make the alteration for you quite cheaply.
They surely are using custom theme, as they prepare their themes themselves. I assume they are doing designs by themselves.
I wouldn't count on it. Their website just links to free themes uploaded by other people, it wouldn't surprise me if they've taken someone else's theme and adapted it rather than start from scratch.
I highly doubt this site does any design work at all. They rip-off other peoples work and say that the original authors submitted it to them, and if you believe that, then I have some really nice free premium WordPress themes you can have for $49.95 Here at DP, ChrisMorley posted a link to a great blog post at WPMU.org concerning these free sites, and it is worth a read: Why You Should Never Search For Free WordPress Themes in Google or Anywhere Else – WPMU.org
great article @dodger, i recommend reading this to everyone who is using wordpress,joomla,etc., before using a so called "free" theme