When browsing a local city section on Topix.net, a new column of classified ads is displayed in the right column, along with a link to "post your own free ad". The classifieds can be posted into categories including housing, jobs, for sale, services, events and local shops. For example, the topix page for San Francisco includes 2 jobs, 1 for sale and 5 services ads. You can see from the two-level deep taxonomy the types of ads they are seeking.
The service seems to have been rolled out very quietly in early May. As such, there are just a handful of listings so far (8 for San Francisco, 11 for San Jose and 22 for NYC). It seems that the Topix team may be test-marketing the concept before an official launch.
As Steve Rubel points out, it's interesting that Topix, a joint venture between the three large newspaper chains, Gannett, Tribune and Knight Ridder, would go into the free classifieds business. As I've posted previously, Craigslist is putting huge pressure on the traditional classifieds business. Perhaps these three are willing to try to cannibalize their own classified business rather than allowing Craigslist to do it to them. If so, kudos to them for the effort, although they'll have to put the weight of their local brands behind the effort to close the huge gap with Craigslist.
One interesting differentiator is that Topix is bringing the power of social software to these classifieds. They provide the ability for users to add comments to the classifieds, or to flag an ad as being offensive or inappropriate.