Its a tough one for both plugin and theme developers. You need to consider whether 100,000 people using your free plugin(s) makes you money in indirect ways (advertising on your site, paid integration/development services, paid support, writing books such as Vladimir's new one) or whether you'd prefer just a few hundred people use your plugin and pay a modest sum each.

100,000 x $0 = $0 + unknown potential for indirect earnings as above
300 x $10 = $3000 + they're going to want free support for a paid plugin

My view is a little simple plugin is something I would develop and support (best effort) for free. Revenue would be when people recognise my reputation as a plugin developer and request I do custom work for them. If I wanted to make direct revenue from a plugin I'd do something similar to WP Ecommerce, give away basic functionality free and charge for advanced modules that commercial customers will see value in purchase, and ongoing upgrades/support on a per-release or subscription basis.