Paid hosting has its perks, thats for sure. Its really not something you want if your site doesnt have huge plans to become bigger though. If you host alot of sites, and need the space, paid hosting is good too.
It depends. If you are just doing it for a hobby, I strongly recommend using a free host and forum. Zetaboards is the way to go, they have great support and easy control panels. They won't delete your forum, unless you are going to center it all around pornography. But some paid for hosting will delete your forum for that too.