Your user is here, from a search engine or directory, looking for information or an item to buy. The last thing on his/her mind is to fill in your form asking for a name and an email address. S/he wants content; if you don't deliver content, the red x button (or the next web site) is just a click away. The second worst position to be in now is to not have a subscription form at all. The third worst thing is to have it in an obscure place, such as the bottom of a long page (the top right or left is always ideal).
Get emotional
But the absolute worst thing is to have a blandly worded opt-in offer. If it simply says "Subscribe to our free newsletter," the first thing on the user's mind would be "Why? So that you can waste my time?" Instead the offer has to be worded strongly, and must address a need, preferably emotional. Looking at our power tool company, what do tool buffs want? They want new, cutting edge tools! So to get tool buffs to sign up, try "Reduce time spent on tedious tasks, with futuristic tools. Sign up for free report now" or "15 ways to reduce tool maintenance costs, request your free report now."
Let me give you an example. I was on a music site once that simply said "Get our headlines sent to your email, sign up now." I was not interested in their headlines. A more strongly worded, emotionally appealing call to action, such as "Get hot music news now" could have motivated me.
Your wording must promise joy, or removal of pain. The user will not give you personal information simply because your site is lively. S/he must believe you have something unique to offer.
Not only a newsletter
When I first got into website marketing, and I started building opt-in databases for clients, the only option I considered was ezines. For a hotel site I designed an ezine based on the locality of the hotel. It was located in a lush tropical setting, and I offered a monthly ezine talking about tourist attractions. It was basically composed of short write-ups and an interesting picture. Naturally it included links back to the hotel site, and encouragement was given to viewers to email the page to a friend.
Forums
As time went on, I discovered that it was not only newsletters that attracted users to subscribe. Forums are even bigger lodestones, if your site has an interesting and well-rated forum. While getting pleasure out of discussing relevant topics, a lot of people will register. These registered users convert to daily or weekly hits, and a large database to which you can market your products.
Tutorials
Another option that has often tempted me to sign up is tutorials. You offer a free training program, for a specified duration at a specific rate (daily tutorials, or weekly tutorial). This gets the user to sign up, and voila. Another lead generated.
Downloads
Offer programs, games or useful custom-built software for the user to download. Ask for the email address to send the download link to, and you have somebody to whom you can present your products and link back to your site on a continual basis. This is a good way to get people who want every piece of new software that they can find on the Internet, and who seemingly spend all their time browsing. Included on this list are programmers and computer buffs.
Website Marketing 
