Ithaca, N.Y. Portland, Ore. Eugene, Ore. Davis, Calif. Madison, Wis. Burlington, Vt. Boulder, Colo. Cambridge, Mass. Toronto, Ont. Redmond, Wash. San Jose, Calif. Carrboro, N.C. Santa Barbara, Calif. Palo Alto, Calif. Tucson New York San Antonio San Francisco Houston Louisville, Ky. Teton County, Wyo. Edmonton, Alberta
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Austin has something similar...although it's not completely a city funded program. Yellow Bike releases bikes to public use 4 times per year. The idea is that you use the bike and leave it out for the next person to come along and grab it. You don't have to return it anywhere...just make it available for the next person.
I plan on volunteering there in the near future. They have a community shop as well. Pretty cool program!