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The theory behind the Free Library is that, certainly in the long run, it benefits an author to have a certain number of free or cheap titles of theirs readily available to the public. By far the main enemy any author faces, except a handful of ones who are famous to the public at large, is simply obscurity. Even well-known SF authors are only read by a small percentage of the potential SF audience. Most readers, even ones who have heard of the author, simply pass them up.
Baen Free Library is an area that Baen Books is now making available — for free — a number of its titles in electronic format.
The theory is a very interesting read.