wawamama

I'd use a free site to send business to a real domain that you pay to have hosted. It looks more professional since you are seen as a "real" business and also lets you use the more sophisticated web tools (like a shopping cart) if you want. The free sites are great to help generate traffic though.

weber

Although I have my own domain and hosting, I still use free sites like blogger and some free hosting. These free ones were established long before I had my own domain and host. I still maintaining them in exchange of some links and traffic to my other newly created sites

fitnessk

I think it is important to try to use paid services if at all possible You do not have to pay a great deal of money but will make your business appear more legitimate.

busybeehelpers

I use a paid domain and paid hosting. I know a lot of people who will not do business with someone who uses free services.

SageMother

I think it boils down to what your goals are. With either a free blog or a free site, you have less control over what you can place for viewing. It's that control that determines how well your business performs, even during the first year.

gladiator

You need free blogsites like Blogger because this can help you gain traffic. This should be used for promoting your products or services with the details hosted on a paid webhost.