Sometimes working for free is acceptable when you know your not getting used. I.e if the client doesn't have lots of money and cant really afford to pay you but the job its self is quite exciting and would potentially look good in your portfolio. Turning down this kind of work, if you had the time to do it could be a bad move in the long run. Once you have plenty of stuff in your portfolio and have a bit of experience, then you can be more choosy about jobs and only work for people who are going to pay you!