I think sites that have like a weekly or daily free photo is good. But if they have an entire section with thousands of free photos like Fotolia and Dreamstime, it just hurts sales overall. I think so at least.
I totally agree with this. It doesn't seem good business sense to me to have a whole section free. I'm sure that most buyers will check out that section first and often find something suitable resulting in a loss of a sale.
I've had the same experience as yingyang0 on both DT and SS in that a free image has gone on to be one of my best earners which amazed me given the 1000's of times that they were downloaded free.