Free is the best move. Charging for a service pack would be ridiculous.
Although I suppose it all comes down to what you define a service pack to be, Windows 8.1 isn't a service pack. They're going to completely refresh the OS and flatten the entire Windows directory. There's changes everywhere from Windows Explorer to IE to compiler improvements to new syscalls - at least going by the leaked build.
It might "feel" like a service pack, but it really isn't. It's an entirely new OS whose UI is pretty much the same with presumably a transparent upgrade path.
@evildictaitor:Good point. Although people will perceive it as a service pack, so charging for it would undoubtedly have generated a huge backlash.
What's this about flattening the windows directory?
Unless there's some sort of good reason, like the protracted development of a successor OS. All service packs seem dissapointing after XP SP2.
That's because XP SP2 was misleadingly named. It also wasn't really a Service Pack, despite the name. It introduced DEP in the kernel, several new features and completely restructured major parts of the kernel, Internet Explorer, beefed up Wireless networking and the Firewall.
Really, the evolution of major versions of Windows (NT) kernel is really more like:
NT4 -> XP -> XP SP2 -> Vista -> 7 -> 8 -> 8.1
Rather than (as marketting would have you believe):
NT4 -> 2000 -> XP SP2 -> Vista (or, perhaps 2k3 here) -> 8 surely? Then again it all depends how you define a major version - marketting, method of release, adoption/life cycle, NT version number, UX or internal changes?
EDIT: In fact I think I'd go for:
NT 4 > 2000 > 2K3 > (8?)
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