Check out the final word: http://blogs.msdn.com/b/oren/archive/2011/01/09/marketplace-tip-3-free-app-updates-are-free-even-if-they-fail.aspx
I'm starting the year off a couple of days late so there's plenty to catch up on...
We've got some new policy clarifications incoming from the Windows Phone Marketplace team - though as usual there is still some confusion around free apps. For now this is what I have:
Paid Developer (USD$99):
The same seems to be mirrored for Dreamspark accounts (students with free accounts).
The big "but"
Unfortunately it seems that we're still ironing out the kinks - In reality I am seeing updates to accepted free apps counting towards the 5 credits and then (once you run out of credits) being charged the $20 fee, even for already accepted apps. I'm still trying to get final word on this, but it seems to be the current policy...
Got any good Marketplace stories to share?