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Also, If I am promoting a pay site, shouldn't my content from that paysite?
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Yes, you should use sponsor content for sites that look like they have exclusive content (reality sites and so on). If you promote a cookie-cutter paysite that specializes in the teen niche, you can get away with buying teen sets to promote with without losing too much in terms of conversions.
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So, beside making membership sales, are there other ways I can generate money from my promo/free sites?
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I'm not quite sure what you mean by that question. If you mean other payout methods besides PPS/Revshare, there are free ezines, email signups, dating sites, etc.