Happened to pick up a local news mag called the Easy Reader---http://easyreader.hermosawave.net/news2002/default.asp and the beach city of Hermosa Beach has announced that they have "decided to join only about three-dozen cities world wide" and offer free internet, WI-FI baby!
Unfortunately it does not mention in the article what other cities offer internet for free
But I thought it's pretty to cool to offer something like that to it's citizens.