What this freebie system does is allow the author to offer Kindle books as free downloads for any five days in a three month period. When the three month period expires, you can do it again during the next three months. So your books can be free for just over 5% of the time. I use it a lot.
But why do folk like free downloads so much more than very cheap downloads?
Simple - the free downloads get the publicity. People can be alerted to free downloads via a number of routes such as this web site, but on the whole chargeable books just sit there with Amazon's other 1.3 million Kindle books. As this number seems to be growing at about 1000 books a day, you can see what writers are up against.
Not that I'm concerned either way. I just like the idea that someone at least read the things after all that work, but you get that by writing blogs anyway. It really hits you how important publicity is. My books are a hobby and nothing special, but imagine how many great books are out there, but they aren't widely read because they don't get the publicity.
That's why the first rule of writing is to be famous or well-connected. A published author once told me that publishing is no exception to that age-old maxim - it's not what you know but who you know.