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I do not think that a free domain is an issue with the right host. I would highly recommend reading their TOS and finding out what their specifics are. I would recommend though that once you have gotten past your first 60 days with a host that you move the domain to a registrar if their TOS allow this. Many hosts do allow the domain to be transferred away after 60 days which is a requirement of any registrar. I know that we do this exact same thing with our free domains. Control of the domain should be the customers 100% from day one.
So make sure that you read the TOS before you choose a host offering a free domain and then make sure to transfer the domains to one registrar so that it makes it easier to keep an eye on and control your domains. This is much simpler then trying to log into 4 or 5 seperate registrars with different control panels.
Good Luck!
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