I think WoW got it right with their 2 weeks or level 20 cap, for free. By level 20, you get to experience a couple of primary factors in the game, like pvp, different zones, dungeons, etc. and it was plenty of time to decide whether or not you'd enjoy leveling to max. Of course, it gave no insight into arena or raiding, but no one decides to start playing WoW and spend 100+ hours getting to max level just to do max level stuff. While that may be the main draw, I highly doubt there is anyone who would enjoy that and would hate their first level to max.
I think the goal isn't to have free and paying players coexisting, the goal is to make the free players want to spend their money. I forgot what you were talking about at this point but wrote enough that I think I should post anyway. Sorry, everyone.
/rant
As an enthusiastic fan of multiplayer gaming, let me be the second to say that Windows Live is perhaps the stupidest, most awkward, piece of crap to have ever been designed for gaming. It is inane, it removes functionality, it insists on running in the background while providing no added value, and it screws up everything. Until microsoft realizes what a useless, stupid, infuriating platform this is, they are essentially shooting their pc games in the feet, knees, stomach, and at least a few other vital organs. Please fix this, as some games (Batman Arkham Asylum, Bioshock 2) are actually worth playing were it not for the idiocy that is Windows Live.
/rant
Let me put my opinion into a mathematical analogy (it'll make sense). Let's say there's a big graph. Y Axis is "How great your country is" in some sort of measurement. X Axis is time. We move right on the graph as time moves forward. Right now, the US function may be at/near the top of the graph. However, the derivative of the US function is negative. In fact, if the derivatives of all the nation's position functions were graphed, we would be pretty close to the bottom. Sure, there are some countries (like African ones that just had a coup, or something) that may be falling faster than us, but our derivative is negative and big. And more importantly, our second derivative is negative, and it's also very negative. We are going to get worse faster than we have been, is basically all that means.
Some analysis of that: Position (where we are right now) we rank 1st, let's say. Speed (what's being done right now) we are going in the wrong direction, and we are heading there quickly. Acceleration (what's going to happen to the speed) is also headed in the wrong direction, and its also getting more negative quickly. To translate this to the real world, position is our current set of laws. Speed is the laws that are getting passed that are dropping our position (right to privacy, open government, etc), and acceleration is really public opinion - a positive acceleration with a very negative speed means that the population realizes things are bad, and they are trying hard to change it for the better. An acceleration of zero means people are happy with the direction the country is going in, or at least they don't care enough to change it. Negative acceleration means people are actively setting the stage for the next batch of politicians to be even worse than the current ones.
It may be lengthy, but I like using these three criteria as a means of rating government. When people tell me America is the greatest, I agree, but then explain how it won't be very soon. Most people disagree at first, but after some arguing, most people agree with the acceleration argument, and probably half (democrats, mainly) agree with the speed.
God made the integers; all else is the work of Man. -- Kronecker