If you are thinking of using free host providers to do some business related to your template, then I would suggest you to put .JPG images, screen shots of the template rather than actual template files. In this way you can protect them.
If you are planing something through which users can download free templates available on your site OR buy the template online, then I would suggest you to buy your own hosting rather than going for free ones. There are lot of hosting companies available on the internet, which can provide cheap hosting for couple of starting years. So after an year, if you think that you can do your business very well and you have good success with it, then you can think about getting bigger hosting space with current host providers.
Hope that helps you.
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