Also, I think that if you give something away once, people may be unwilling to pay for something in the future.
I'd have to disagree on that. The model to give something away, and then charge for more is a model that's used in the games industry with much success. For example a company will release a free demo of the game, allowing access to a few levels or limiting access in an open-world type game. It gives players a chance to check it out first before dropping their hard-earned money. The massively multi-player genre (such as Warcraft) usually allow players full access to the game for 10 days for free, to get them hooked.
Now take that model to our music. Give away an album or two and use those as a hook to garner attention and fans. Then charge for the third, fourth and fifth release, etc.
Another idea to really hook your fans, give away your sixth album as a thank you to everyone who's purchased your albums. The idea is to create loyalty in your fans, who are the best at spreading the word of your music.
I could be used as an example. I started releasing my work publicly in 2001 as free downloads. At the end of 2006, I setup my first (and probably only) release available to purchase (Winter Embrace II) as a benefit for StillStream. Between 2001 and 2006, I had 11 free releases. Since I already had a fan base, it actually made money. It's been purchased around 350 times. The fact that it was benefit for StillStream definitely had a part to play in those purchases, but it's also available on iTunes and eMusic which has no mention of StillStream... and that's where 85% of the purchases came from. I can guarantee that if I charged for all my releases, would be far lesser known and would result in less profit.
And I still consider myself in an obscure deep hole of a sub-basement when it comes to underground "unknown artist".