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/Peo, FreeWebSpace.net
You could consider Hivemaker (http://www.hivemaker.com). It takes a different approach to free webhosting and this imposes certain restrictions people might dislike. For instance, users don't create their own website. When it is released it will have a library of templates that a user MUST choose from. This template can have it's CSS modified to dramatically change the appearance, however the basic XHTML will be the same. So, it is very easy for people who do not have XHTML knowledge but it isn't made for semi-experienced users seeking a webhost. It is also still in an alpha testing state and the templates aren't finished. Check it out, it might be something you like.
Also there is XPanel (www.xpanel.org) that is a more conventional free hosting style script. It doesn not really support any templating features but it is a great piece of software, and cheap.