I've been building a web-based mockup tool called jMockups for the last several months and I'd like to get your thoughts on when and how to charge for it.
I've asked several experienced members of this community whether I should charge from the start or wait and charge down the road and I've had mixed feedback. Those that say charge now say that I should establish from the get go that this is a high quality product worth paying for and that transitioning from free to paid is a pain (which from my own experience with previous sites is true).
Those that say charge down the road say that I want to get as much feedback as possible right now to make it a better product, that I'll get more inlinks and buzz because more people will try it, and that I'm in this for the long term so its not a big loss if I don't charge for the first few weeks.
The second issue: how much? Balsamiq is the clear leader in this space and their main product sells for $79. We don't have identical products -- theirs focuses on low fidelity whereas mine currently focuses on high fidelity mockups -- but there is a lot of overlap. I plan to charge per month and offer a free option for folks to try it. I find myself basing my pricing off of this $79 number ($7/mo = $84/year) and while I think thats something that a lot of folks would pay, some of the feedback I've gotten is that I'd be better off charging much higher... $20/mo on the low end.
I don't have enough experience to decide with certainty on either issue which is why I've been asking for feedback and I'd like to get yours too: charge now or wait and how much?
Now, as to your specific questions:
1) I'd start charging right away. If you can't get enough users to get good feedback, then that's feedback of a different kind. I don't see any serious upside to getting lots of free users, if you don't already have a business model built around that.
2) My gut is telling me that $7/month sounds low for this kind of product. If you've got compelling advantages over Balsamiq, and a good way to induce trial (i.e., the "free option" you mention), then I'd be thinking in the $15-20/month ballpark. I say this because as a business user, honestly, when evaluating a product that will help my business earn money more efficiently, the difference between $7/month and $20/month is basically a rounding error. They both fall into the "pocket change" bucket.