I think it doesn't help you (as an entrepreneur) or the customer if you aren't forthright,
especially in your initial communications, which are setting up their first impression of your product and your company.
When I was working on AdGrok, which did Google AdWords campaign management, the very first thing that would save thousands per month is to add the negative keyword "free" to their ad campaign: People searching for "free $whateverYourProductDoes" are not going to be easy to convert to paid, and are likely skewed towards subsequently toxic customers.
There are many "freemium" products that hide the limitations of their free offering, which may result in higher initial conversions, but no one feels good when they're "tricked" into using a product.
Clearly enumerate what's the value-add of paying for the thing, and make sure there's actual value to that value-add.
Also: it's (possibly) PR-worthy when you make previously-paid features be free. It's flame-worthy when you push previously-free features behind a paywall. Consider being conservative with your free tier due to this imbalance.
(I'm wrestling with what's going to be in the "free" versus "plus" tier for PhotoStructure right now!).