The just released Industry Canada commissioned study on P2P downloading has been getting a lot of attention in the press and blogosphere. Essentially the study found that P2P music downloading has not caused a decrease in music sales. Indeed, it showed that those who download a lot tend to buy more.
More food for thought on the debate over giving away things to make money can be found in a post by Chris Anderson entitled Free is more complicated than you think.
He refers to a column by Scott Adams (Dilbert) and concludes that making a book available for free can help with visibility and sales for authors and topics that are not well known, but may not work that way for well known authors. So, as in many things in life, the answer to the dilemma is “it depends”.