I think you're right about V4V at a professional level. See Adam Curry's podcast. Donations are down.

I've seen interesting results at the hobby level, though. Someone asks you to make them a hat, so you do it for free because you like making hats and making people happy. They want to pay you something, so you tell them, "Pay whatever it's worth to you if you insist, but it's really not necessary." These people will drop 2-3x what they could've paid at a store.

...BUT...

They don't NEED to buy it and you don't NEED to sell it. Outside that scenario, you better set a price and charge admission.