We encountered out of state waivers in several offers last year, but they only applied to states which were somewhat adjacent to Kansas. They were all academic, as stanwood says, based on test scores, GPA and class rank. They called this a reciprical waiver, implying that our state is also offering waivers to kids coming into Kansas. We found a little map on the university website that showed which states were eligible for this waiver. Its really boosted the general recruiting at our HS, since kids know they can get a tuition break right up front...no essays or special applications needed, just submit your test scores and transcripts when you apply to the school.
I can tell you that my son's out of state waiver is very different than an athletic scholarship. Its good for all four years as long as he keeps his grades up. He is classified as "in-state" for billing purposes, which simplifies our billing statement.
This is just what we experienced and its probably different school to school, but its saving us just under $10,000 per year!