With paid hosting the main benefit is the ability to use your own domain name. This is important especially when it comes to branding your product or service. The domain name http://www.yourproduct.co.nz is a lot nicer than http://www.someprovider.com/yourproduct or http://yourproduct.someprovider.com. Not only does it appear professional, it also gives you more control over your SEO.
