But the Ravens got enough yards before punting that it took it out of play. It, along with the 1-point safety, are my two favorite rules in the sport. I believe the announcers at the Super Bowl brought it up as a possibility eventually, and they included a list of past scenarios.
I was at our rival high school's game against an out of town power. Rival was down 1 with about 10 seconds left. Punt return man fair caught the punt at the 50. They put the ball on the tee and rival h.s. kicker booted the thing with all he had and made it. This is back when the high school players kicked non-soccer style with a squared off kicking shoe. Pretty cool.
Yes, I believe it is applicable for all levels.*
I learned about this during one HS practice 14 years ago. We never had the chance to use it, which is fortunate since no one knew what the hell was going on.
My understanding is that the free kick must be done off a fair catch. Otherwise, it works exactly like a regular kick-off with the exception that if it goes through the uprights, you get 3 points. I think if you miss, it is a turnover.
* EDIT: Apparently only NFL and High School
situation rarely occurs.