(Basically)Freemium?

In his book on free, Chris Anderson suggests there is a bigger jump from free to a trivial amount than from a trivial amount to more, so you need to consider carefully whether you want to charge - will you really gain from adding what is a substantial barrier?

Also, as soon as you start charging a small amount, people will start to expect support and feel they have paid for the product.

As a user I really love products with a basic, free version. However, I understand that it might not economically feasible for the vendor to offer such freemium version.

If you're selling a product installed on end-user machines, each free license it's simply a missed sale and it costs you nothing. If you're offering a service (like us), every free account incurs costs to you. In our case, we won't be offering a free plan, but we'll offer the service for free to all open-source application developers (being a dev-oriented service). Plus, prospects will have a 14-day free trial (no strings, no credit card required).

I've seen the "charge a nominal amount" work very well.

You're right that it qualifies the user. It's amazing how many people won't pay e.g. $5 or $10 for something they really need. Clearly those people would never have paid you any amount, so if the ultimate goal is to convert (some of) them into "real" paying users, it's a great way to weed out the silly stuff.

On the other hand, if the goal is to get something into the most possible hands, nothing beats free. It depends on the business model which one is more valuable.

If the idea is to replace "free trial" or as a stepping stone to eventually charging more, I hate the free model if you can afford to charge a trivial amount instead.

Only one thing though -- often "free" people understand that there's no tech support or other services that come with it. But even for just $5, some people suddenly expect the red carpet, even though clearly $5 buys literally no tech support at all -- it will barely cover the cost of processing the payment!

Of course if you're starting out and you want people calling you and talking about your product with you, this is a bonus; otherwise it's an expense you'll have to monitor.

For me, it's all about getting potential customers to look at your product. The simplest way to do that is to give it to them for free. The model that I like is the try before you buy (e.g. full version free for 30 days (or whatever duration)).

If you product is useful to customers, then they will want to buy it. Giving potential customers the opportunity to try before they buy shows that you have confidence that your product will add value.