i think the big problem with freehosts is scalability...
i started my freehost last fall. within a week i have 350k uniques a day. in two weeks i have 650k uniques a day and was number 5 or 6 on the sextracker "site" listings.
it took me a while before i could manage the ads and to make everything work. the sad part is that i was capped at 20mb/s for a month or two when i could of been growing. i just didnt want to dump more money into the thing. luckily, i found something that worked with the ads and have since been able to open up the b/w more. it took me a while to get 47.5 worth of freehost b/w profiting. but, in the end, i guess its worth it.
as for cheaters, yes there are many. they newest thing is a extracting/retrievel program that puts movies into 100 gif files are so. its tough but worth it if you can make the freehost profit. plus, then you have all those webmasters to market to
