The concept of using a free version of your service as advertising for a paid one has been around for a while, but TechCrunch's MG Siegler just profiled the technique along with a list of apps he thinks should adopt this model.

MG notes some of the benefits that the freemium model offers consumers (above and beyond keeping their favorite startups fed).  One of his favorite is differentiation - offering the users of free services the ability to pay for the same service to weed out the riff-raff who wouldn't put their money where their mouths were.