I think you are confused as to what "free dining" is. I am pretty sure that there are certain times of the year when disney offers the dining plan free as part of their packages...if you book by this date, you can get free dining plan for your trip, etc.
I don't think "free dining" has much effect on the crowds at the park.
As of right now Free Dining is offered on various days of the months until September 2011, although it's not scheduled for April 2011 and July 2011. However there still might be guests on the regular Disney Dining Plan, Deluxe Dining Plan and Quick Service Dining Plan, so there is more then just Free Dining always happening. Plus in a few months WDW might add Free Dining for October, November and December 2011.