Are you talking about the standard version of a "free site", as in 4 pages, warning, main, two galleries?
If you are:
1. Yes, you need a warning of some sort. That first page of a freesite is a warning page.
2. Yes, but if you are using sponsor content only promote that same sponsor on pages that you are using their content.
3. You are going to submit your freesites to link lists, yes?
Here's a good starting place.
4. The best place to start is
here.
