elkjar got it. I have my own server and is costs me no more then regular internet fees. So if I was to set up free hosting I wouldn't be looseing money but insted I would set up a free hosting to attract visitors and then add paid packages and other things to actually begin making money off the site once you have the visitors coming.
Also if your providing great service for little or no pay, people might be more inclined to donate to help keep the great service going.
Thats how I would see it working quite well.