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Well there is a grain of truth in both viewpoints, we will break it down further and give you the pros and cons of free hosting;
Free hosting, PROS
Free hosting, CONS
All said and done free hosting companies offer a service that may be suitable for those website developers starting out and have limited knowledge, time and capital. So as a short term solution free hosting will serve a purpose.
However as a long term investment the cons no doubt out weigh the pros.
Web hosting has become very affordable in recent times. For about $50 a year, you can find a reputable company that will provide you with an all singing, all dancing hosting package.
Free hosting has a negative vibe in the commercial online world. To illustrate the point imagine walking into a restaurant that a broken sign, dirty floors and a funky smell. Well chances are that you would take your business elsewhere and unfortunately the same applies to free hosting.
Free hosting screams not quite ready to do business.
Related article: Top 10 hosting companies

Free hosting is a very topical issue when it comes to hosting your website and there are many reasons for this. There are two divided camps when it comes to free hosting, and to be fair both camps make some valid points.
On one side there are those that say free hosting damages your website and brand in the long run. On the other hand some say free hosting is the best thing to happen online since sliced bread.