Lightspeed runs an almost identical program with slightly higher dollar amounts: http://www.lightspeedvp.com/summergrants.aspx

Has anyone actually done one of these?

One minor but significant difference between these two programs is that Lightspeed requires that you have an engineering student on your team, while Summer@Highland will accept any student. If I am a law student and my hacker co-founders are not students, then my team can apply for Summer@Highland but not Lightspeed. I wonder why Lightspeed has that additional requirement.

So how are Menlo Park, CA and Lexington, MA as locations? I know that Paul Graham places great weight on the location of your startup, and each of these Y Combinator competitors requires you to move to a different town. Should that be a significant factor in applying to Y Combinator instead of Summer@Highland and programs like it?

Menlo Park is literally next door to Palo Alto. It's one of the nicer Silicon Valley suburbs.

Lexington is also right next to Cambridge, MA. These locations are totally equivalent to their Y Combinator counterparts.

This sounds like a great opportunity. It would seem ideal to have a 2-person team, since there would be no monetary hit and you could have a friend with you.

I agree this is a great opportunity worth looking at, but having a friend with you? Using investment dollars to fund your buddy's summer on your couch seems a little unwise to me.

That's the beauty - it's a grant, not an investment, so you won't be diluted. That said, multiple founders solve a lot of issues.

Well, I meant someone competent that you would ideally be on friendly terms with.