It depends on what your site is and what kind of traffic you are looking for. Free traffic comes in many forms and you can only know what kind of free traffic will work best if you know your niche and target market.
Nowadays the most useful free traffic generation method is posting videos in the video sharing sites.
Start with link exchanges from related sites. It's slow and steady traffic that you will take for granted, but is helpful.
Depends on your website and why you're trying to achieve free traffic. It's easy to generate non-sustainable traffic. If you're looking to actually create a userbase and generate repeat visitors, it's best to find people in your niche market (blogs, community boards, etc) and get involved. Start a local tribe.