During my time at Spike (http://spikehq.com) my team and I worked on this case study, outlining how and why Tell-A-Friend campaigns work in conjunction with email marketing.
It works on the premise that people can win a prize or a range of prizes if they enter their details, including email address. If they "Tell A Friend", they will gain another entry into the competition, thus increasing their chances.
See below for some screenshots.
Contact Spike if you would like to know more.