We're still on trial and error mode on what to give away for 'free' and price points.
At the start most users didn't even use 1/2 their free quota s. Which is both good and bad. Good in that most 'free' users weren't putting a strain on the servers, but it's also bad because if they were leaving half-empty (quota on the table), there was little incentive to pay up. The other variable in the process is that if the 'free' quota is too low, nobody is able to 'test' their videos for free (so it's a balancing act to get average video size too to fit in the free quota)
User acquisition and marketing has been the most problematic for us. Our conversion for paying customers is still in the 1/50 range! If you consider average adword clicks in-around the .30-.50 cent range, that's about 15-25 dollars to get a paying customer on average. Operating at this level the margins are razor thin to say the least (We've tried to cut down on the marketing costs, but bidding anything lower than that and you get little to no traffic)