I don't think MobileMe will be free. Apple is not a philanthropic organisation. I see Mobile Me receiving more free parts. Perhaps something social to jump on that bandwagon.
I use my Mobile Me purely for document storage. Mostly because it's cheaper than Dropbox and integrated better with iOS and OSX. (Switched from dropbox recently). I'd be pretty annoyed that I just paid 150 bucks on my family plan just to see every guy and his dog get it for free. There better be some refunds on my unused time there or customer support is going to get a tough one.
Maybe they'll just make a tiered pricing system with perhaps 1/2 GB free and over that you pay a fee. Would make sense.
Id be willing to wager anyone here that MM me will become a free service this year, or at least the vast majority of its features. This has nothing to do with philanthropy. It has everything to do with increasing the inherent value and attractiveness of its products, by giving more functionality to more users. I'm betting the percentage of people who use MM is very small, and its to Apple's benefit to greatly increase this number. They would be more than able to absorb the bandwidth costs, and the advantage of being able to advertise this service, which would benefit anyone with a mac/ios device, will greatly offset this, as well as increasing the synergy between these devices.
Also, can't stand those people that bitch about something becoming cheaper/free, then expect/demand a refund for everything they've payed. You decided to pay for it because you decided the the service was worth the money. They have to right to decrease the cost at any time, you didnt sign up with a damn guarantee from them that it would stay the same price forever so you could feel good about yourself. Its a sign of immaturity and jealousy, since them decreasing the cost has absolutely no negative effect on you, only positive effects on others.