I have an initial phone interview coming up with a company for a Senior Web Developer position and in the email they asked to prepare by signing up on their site because they'd like to hear my thoughts about it and suggestions for improvement.

I've heard stories before of companies that do this.  They interview 10 people and then if everyone gives advice, then they've got a lot of free consultation.

I believe this is the first time I've ever been asked to do something like this so I wanted to hear other people's thoughts of whether it is free consulting or if I'm just being paranoid.

I think you are being paranoid.

If they are interviewing phone screening 10 people, that's roughly 10 man-hours they are spending in on this phase of the interviewing.  Plus the cost of advertizing the job, reading a bunch of resumes, etc.  And they are getting random ideas from 10 developers, many of whom are probably "also rans" in the employment race.

Then ask yourself:


What is an hour of your time really worth?  
How much are your ideas really worth?
Do you want the job or not?


So, they might end up using some ideas from people who they don't employ.  It could be construed as free (albeit slap-dash, second rate, etc) consulting ...

But so what?!  Ideas are easy to have.  Successful execution of the ideas that is the hard (and expensive) part.
