If your using a free host, would that effect your PR?
-and-
If you were using a Paid host would it effect your PR?

the only difference is paid usually comes with built in links - usuaally as banners

difference would be that free hosts wont give you your own domain, I'm not sure how much of an effect that has on SEO, but does i have a big effect on traffic to your site?

you can point a domain at free hosting

I don't think it makes any difference. I did a search last week for a limerick with some keywords and the top result was on a free site with several banners. The site was also in several directories including dmoz.

Like so many other threads on these forums, you need to keep in mind the users. Once you get to the top of the results and start attracting users, once they land on your page, will they be put off with all those ads?