Okay, this is straight from the IRS's mouth (see this page -- the following is a selection of quotes from that page):

The Economic Growth and Tax Relief Reconciliation Act of 2001 approved by Congress and signed by President Bush directs the Treasury to send checks to most income taxpayers this year, giving them an advance payment of a 2001 tax credit. This is a reduction of tax and is not taxable income on the federal tax return.

Translation: this is not a "refund of taxes paid" as DougR et al. would have you believe, but rather an advance payment of the amount they expect you will save on your 2001 taxes due to the tax cuts. Sort of an interest-free loan from Uncle Sam.

Taxpayers whose advance payment is larger than the credit amount figured on the 2001 tax return will not have to pay back any difference.

Translation: if they were wrong, and the amount of money you actually save on your 2001 taxes is less than the money they send you this summer, you get FREE MONEY from Uncle Sam! No strings attached! It's better than Christmas! Christmas in August! (September for you late-digit types.) Who pays for this? The rest of the taxpayers, of course.

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Hey, don't take my word for it -- click the link above and read it for yourselves!

Alex