For more information about the gift tax, the IRS site has a helpful brochure
http://www.irs.gov/pub/irs-pdf/p950.pdf
A married couple can make a $24,000 gift to anyone without tax liability. In addition, you can make up to the annual exclusion amount to any number of people. The exclusion applies to each individual person you give a gift to.
So a married couple in any given year could give $24,000 to a friend, $24,000 to his wife, and $24,000 without incurring a gift tax. Even if you do exceed the exclusion, you can apply for a unified gift credit and not owe a gift, which based on the 1 million limit ends up being somewhere around $340k in taxes.
If you don’t use up that $340k by the time you die, you can also apply it to reduce your estate taxes. Not sure how that works.
Of course I’m not a tax attorney so I may have misunderstood some things in the document.