Have a read of the description of the way this works:
http://www.telegraph.co.uk/travel/main.jhtml?x ml=/travel/2006/02/18/etonthecase18.xml
The explanation of the Company - which is a bona fide business - in the first 2 pages of the article should allow you to decide what is meant by 'free' and what is not. Note by the way it is the company spokesman that says 'the company has been trading successfully for 5 years.....' not the article author...
Henley Marketing that run the bookings for European Vacations (as noted in the article above) are a mail order company - not a travel agent and though they claim insurances against failure, any overseas travel should really be booked through travel agants not marketing companies, but if the savings are worth while and you don't mind the gamble, you could save something on the break. Your choice...