Dodge asks, "How is it that my friend is able to use free wireless hotspots from their laptop?".
Well, now adays most laptops come standard with a "built in" wireless adapter (generally a Wireless G adapter, which is compatible with older Wireless B networks).
You can also buy wireless network adapters for your computers (laptops and pc's alike). These can come as USB adapters or PCI adapters (or in the case of laptops, PCMCIA adapters or ExpressPort adapters). They're relatively affordable (ranging from $10-40+) and generally easy to install (with systems now adays having Plug and Play you simply insert the adapter and start your computer).
Now, plenty of stores offer free wifi, you simply just tell your computer to look for open networks and it'll locate anything that's available and ask if you'd like to connect to the network.
It's safe to say though that most of the hotspots you'll find are various people who've left their home internet connections open to make life easier on themselves (not having a password means that you can connect without a password like at a general hotspot). You'll find these a lot, here in Portland, Oregon I can find several hundred just by walking through a large neighborhood or a couple of appartment complexes.
There are some safety concerns to keep in mind however; by connecting to someones wifi without their permission you're basically stealing from their connection. It's also safe to keep in mind that you're connecting to their network, so there are security issues to keep in mind (they can "sniff" your traffic on their network or they could access any open network shares that you may have on your computer (thus leading to your files being downloaded)).