Free Webhosting:

Firstly, it doesn't cost you anything, ever. To be honest that's probably the only benefit that you'll ever get from free webhosting. Now for the mountain of drawbacks from free webhosting.

You normally wont be able to have your own domain name, makeagreatsite.com for example. It's more likely to be something like www.youresitename.freewebhost.com So it wont look very professional at all. People will think, "If he/she doesn't care enough about his site to pay $50 a year to get his/her own domain name, he/she can't have anything worth looking at." $50 a year is an example, but you get the picture. This may also devalue your search engine optimization, as your website is more a subdomain than a standard site, so search engine may degrade your ranking.

Secondly you'll have ads pop-up on your page or big banner ads, you might think "Great I get paid when people look at them or click on them", wrong, the free webhosting company gets paid when people click on them, that's why they can make it free, that's how they can make their money. This also looks very unprofessional, mostly because the ads could be about anything and are unlikely to be of interest to your specific website visitors.

Thirdly, your bandwidth is extremely limited. If you don't know what bandwidth is, it basically determines how many people are allowed to go to your site, the bigger the images, downloads and pages etc, the higher the bandwidth useage, the less people can come to your site. Some free webhosting companies give you 100 mega bytes bandwidth, others give you 1000 mega bytes. It's unlikely you'll ever get more than that.

So let's review:
Free webhosting puts banners and/or pop ups on your webpage, you don't get to choose your own domain name in most cases and you wont be abe to get as many people to your website.
So what does this mean?
It means that if you're selling a product or service or are expecting a lot of people to your website, then free webhosting is not you. However, if it's a personal website where you just want to talk about yourself, or have a photo album on the internet for example, the a free webhost if probably for you. No need to pay for services you wont use.

Paying For Webhosting:

Now here's where it gets interesting and where your choices really open up. I suggest that you only stick with the paid for webhost that I recommend, as I've tried them, spent money with them and used thme for a long time, but I'll get to specific ones later.

Let's start with the benefits:

You can have your own domain name i.e. pick whatever you want it to be and if it isn't already taken, then it's yours.
You have full control over your website i.e. the look and feel and you can customize anything and everything you like, providing you have the skills to do so.
You can have MANY more people come to your website, as your bandwidth limit will be much higher.
If you have the skills to, you can put a forum up, which will give you're website users a place to discuss things, most free webshosts don't allow this.
You can use ftp (File transfer protocol), this might not seem like much, but it makes it a lot easier and quicker to add new files and update or delete old ones. As they say, time is money.
No annoying pop-ups or intrusive ads that have nothing to offer your visitors. Instead you can put your own ads up and rake in all the money. I'll explain how to do this in the "Make Money From Your Website" section. You'll also normally get much better and quicker support. You are paying them after all.

Now for the draw backs:

Obviously, it costs money. However, compared to the amount of money you can potentially make from a website, it's really not a big deal. It can also be perhaps a little overwhelming at first, but this soon passes and you get stuck in after a while.

So lets review:

This time as you can see, the benefits far outweigh the drawbacks. If you intend to be successful and run a business online, or run a website where you wish to make money, looking professional is of upmost importance. Paying for webhosting allows you to do this, because you have more control over the look and feel of your website and you will have a proper domain name.
So if you're going to run a website that you want to make money from, paying for webhosting is a MUST. There's no maybe's about it. You simply have to pay for webhosting if you want to be successful.

Costs:

The above 2 summaries should have helped you decide which type of hosting is for you.
At the end of this article, I'll recommend a few webhosts which you should take a look at. For now, I want to keep you informed about the costs of running a website with paid for hosting.

A decent webhost company charges about $77. That's $5 for a new domain name and $72 for the 1 year's webhosting.

For some people reading this, that might sound like a lot, for others it will be small change. Either way it's a bargain for what you get. Not to mention that if you follow my advice in the "Make Money From Your Website" section of my website, you can potentially make more than that in a month, then the rest of the year you're in profit.