The Two Thirds Rule is very simple: for all the people that sign up for a free event, only 2/3 of them will attend. This has been true at all the Lunch 2.0s and BarCamps I organize (BarCamp Amsterdam IV being the exception) and I know it was also true at the TechCrunch/eBuddy Meetup. I also see that this occured at the San Francisco iPhone Dev Camp.
So what? Well, as an organizer it’s frustrating to plan for more people than actually come (food may go wasted, etc), so it’s good to be able to know how many people will really attend. Some people figure it’s worth charging a small but noticable amount (say €10) to make people feel committed. I haven’t done this yet, but my hunch is it would increase your yield to something like 3/4 or 4/5 of signups.