Basically the deal is any person with a .edu address can shop online at any Microsoft retailer (Dell, H.P. etc), spent $799 and you get a free Xbox. You can also go into a store like Best Buy and get the same deal with a student ID.
In the wake of Sony’s recent PR nightmare I guess MS is looking to capitalize. Personally I think it’s a pretty good deal even through 800 for a laptop might be a little steep. Its going to be hard not to take advantage of this since I have an .edu address.