He tells you to download it and read it--he does not invite you to claim it as your own work and sell it, and he states that readers are not allowed to modify the content. The only reason I know about this is that my husband picked up a copy of the mass market paperback.
http://www.scalzi.com/agent/Legal Notes: This work is copyrighted by John Scalzi. The novel is freely given and may be freely distributed on a non-commercial basis, in whatever electronic format you please, as long as the work remains intact and unaltered and is attributed to me, John Scalzi. All other rights are reserved by me, specifically commercial and derivative rights. If you are interested in commercial and/or derivative rights, contact me.
Mass market paperback? How did it get there from being a freebie? According to the paperback intro, he invited people who liked the book to mail him a dollar. He collected $4000 that way before it became too much of a hassle and he asked people to stop. A science fiction specialty publisher asked to publish a special hardcover limited edition of 1500 copies at $30 each, and 26 extra-limited copies leatherbound in a handmade tray for $150. 10% of profits to be donated to charity.
http://www.scalzi.com/whatever/003435.htmlScalzi's paperback intro reported that some of those $30 books are being sold on ebay for hundreds of dollars. (Note that is didn't even bother to suggest that they shouldn't be allowed to do that.) It was only then that a mass paperback publisher approached him to do a regular paperback book deal. They seem to be selling well despite the fact that to this day you can still read it for free online. In addition, the whole process has increased sales of his better known books.
And that's why I don't get this bullshit argument from another thread that downloading a freebie is plagiarism. The latter is specifically defined as setting up a separate for profit production run and selling someone else's work. Seems to me like there is steadfast bullheaded refusal to look at dozens of possible new business models that can support creators that are made possible by cheap and easy reproduction.
If I'd been one of the original online readers, I probably would not have spent $30 for a hardcover, but I definitely would have bought the paperback when it came out. (Note that he has updated a number of dated cultural references in the paperback. It is really astonishing to me that the passage of a mere five years would make that necessary.)