It's been my experinece that NOTHING is for free. There is some advantage to someone (other than yourself).
* Sometimes that advantage is the knowledge of a good deed or helping someone else (as I find is often the case in such things as Open Source Software).
* Sometimes the advantage is "Free" Advertising for the "UPGRADED" version (as you have alluded to). They hook you with "FREE" then they SNAG you with the "Add-on's" or "Upgrades".
* Sometimes the free is an outright scam.
This site is hosted for "Free" by http://www.dotservant.com/ with the caveat that we give them some "Free" Advertising (at the bottom of every page and on the main page of the site) Which I am happy to do given the expenses ( and headaches) that can be incurred.
Only you can decide if it's safe, secure and/or worth the upgrade. I guess you need to balance the cost of upgrade with the level of service you expect. I don't think the host itself is a scam, however they are relative "NEW" to the internet (WHOIS has a creation date of 24-May-07 ) so they are only about a year old. If they were a true scam, I suspect they would have been put out of business by at least August or September of 2007