Is free virus software as effective as retail virus software

I use "AVG free". I think so.

We use the "Antivir" free version with 5 computers since 1 year, and
no problem at all.
http://www.free-av.de/
http://www.free-av.com/

I use the free stuff.  And it works.  Adware, which is the software I
use, only wants it used for personal computers.  They charge if it's
used for a business.

I use AVG from Grisoft at home (free)and McAfee at work (not free). My
personal preference is AVG. It auto-updates more smoothly and sends
virus infected mail to a quarantine vault without being asked. Once a
week or so I also use www.housecall.trendmicro.com which is an
aggressive (free) on line virus scanner.  In the two years that I have
been using AVG it has never let anything slip through that housecall
detected. I think a combination of Zone Alarm, AVG and Adaware (which
is spyware detection) will keep your PC in pristine condition and best
of all, it is all free.

I really dont understand how AVG could be as good or better than
retail software, it just does not make sense.

How can it be free?    nothing is really free in life, so whats the
catch with this free virus soft ware?