Hints of a free MobileMe service can be seen in a new framework in the iOS 4.2 gold master. Error messages show when a user has reached "the maximum number of free accounts" for a given device and when a device is not “qualified for free MobileMe service." There's also a message saying that an Apple ID can't be used for MobileMe Mail but can be used for other services.
When the iOS 4.2 GM originally dropped last month, many people noted that it allowed users to sign in to their MobileMe accounts using their Apple IDs. This led to renewed speculation that Apple might offer a free MobileMe service for iDevice users through their Apple IDs.