the software must be free so that a large community is built around the software. you monetize some small slice of that pie. tech support or customizations for commercial customers come to mind.

i read about an MMO game in development that has an interesting approach. instead of WoW's monthly fee, the game is free. You pay money for in-game currency. that leaves much of the gameplay available at no cost. you might not ever need to spend US dollars. but if you kind of suck and need bootstrapping or dont want to put in the hours of 'grinding, an infusion of real cash would help.