I can't select more than 3 or so words at a time before being bugged to go premium, and some words refuse to translate altogether, just bringing up the "go premium" box.
If you select 2 adjacent words it will try to combine them into a phrase and you only get 10 phrases / day for free on the free plan. You get unlimited single words for free though so you CAN continue using it heavily without paying if you like, it's just not quite as useful.
Have you played with this number at all? 10 phrases per day seems awfully low in my mind. If I was to download this extension, I would want to use it for a day or two before paying for an upgrade. I imagine you hit 10 phrases quite quickly, and this might turn some people off of the product before they fall in love.
You could be right. It used to be 20 for free, but I lowered it so that more people would actually hit the limit and get the "Go Premium" message. It's hard to know what the optimal number should be. For a while I had a split test running where some users had 5, some 10, and some 20 per day. But there weren't enough users to see a significant difference in conversions.
I think the sweet spot is probably closer to 100... you want people to see how great it is when they use it a lot.