AFAIK Delphi isn't free for any purpose since Embarcadero bought CodeGears. They removed the Turbo edition and they put an evaluation copy with "time limit". I think it was a bad idea. As you said a free full functional version will help to get new users from schools and universities and self-learners. I've read at Lazarus' forums and mailing list that there are several schools and universities that are using Lazarus and/or Free Pascal right now. I think Embarcadero must re-think about it.

BTW I did read some good words about Delphi 2010. I can't remember where I read that it will support both .NET and Mono. I hope I can test it someday for free because I can't buy it.