The first thing that you must realize when looking for a free hosting provider is that nothing is truly "free". There will be some sacrifices?
First of all, if you see free hosting that promises to be without ads or banners, then it's not truly free.
For example, DotEasy.com, promises "Cost-free, Banner-free" hosting, but in reality what they are really saying is that IF you register a domain from them for $25/year (GoDaddy.com $8.95/year) or if you would like to transfer a domain for a $35 fee THEN and only then will they give you 100 MB of free hosting, that's why they can offer $5 dollars for each referral to DotEasy.com's "free" hosting. Great deal, right?
Tips on choosing a free hosting provider?
1) Always choose the provider that puts ads on your site over the one that claims not to. The companies that place ads on your site tend to be more stable and you always no your partnership with them, "I make site" + "They put ads" = Win-Win. But when you choose a host that claims not to put ads on your site you are giving him all kinds of freedoms to exploit you to make a quick dollar, like selling your e-mail address or shrinking your space to force you to upgrade to a paid package.
2) Always choose a free hosting provider that offers sub domains in the format of "http//yoursite.theirsite.com" instead of "http//www.theirsite.com/yousite". Not only is this more professional but it also helps with getting returning visitors and Search Engine Optimization, which every site strides for.
3) Make sure that they can provide you with upgrades (both for sub domains and domains), because when the day comes that your sub domain site gets a million hits and starts making sufficient amounts of money you will not want to be changing your sites URL and loosing all of your returning visitors and search engine rankings.
The main point is that free hosting is a partnership between the provider and the "customer". Everybody wants to get something in return, whether it is advertising space or selling other services, so the basic rule of thumb would be to find a win-win situation but to make sure there is a way to get out unharmed if the partnership becomes unbalanced one way or the other.
Emil Davtyan currently works for Gig4Free.com, a performace based free hosting provider which offers 1GB Storage and 20GB bandwidth for free.