My long term average open rates are 50.6%, 54.2%, 52.5% and 58.1% respectively - that's for weekly, curated news. They certainly drop a little over time and I've discovered two of the key reasons so far: people skipping some weeks due to e-mail overload and increasingly strict spam filtering.
What's a little annoying about this at first is that e-mail advertising is typically sold by CPM. So let's say I have 20k subscribers on a list and I can sell for $20 CPM (not unrealistic at all in e-mail).. that's $400. But that's $400 whether my open rate is 20% or 60%.
The most eagle eyed advertisers will ask for historical click rates and open rates but you'd be surprised how many don't. So in a way I'd rather charge per click but this doesn't seem to be accepted practice in e-mail right now.
Last, I've not found the word "free" to be too much of a problem. It's pretty common in mails and doesn't appear to be much of a trigger unless you all-caps it or add exclamation marks (e.g. FREE!!)
What absolutely massacred one issue of a newsletter, though, was the "Do You Really Want to Be Making This Much Money When You're 50?" post that did the rounds on HN recently. I included it and that issue's open rate fell by over half! Why? It's about as spammy a title as you could get and set off a ton of bells. So now I do even more spam analysis with each issue I send ;-)
BTW, I'm always happy to answer questions about the e-mail newsletter game, so feel free. I could probably ramble here all day about it. It's fun!