What motivates someone to host a free proxy server?

In addition to the other answers, in my experience often  it's pretty much accidental. If you set up an internal proxy incorrectly it can easily become accessible to the outside world.  Internal network changes, updating a server, installing some software which enables a proxy or even installs one. A single line on a firewall can enable an 'accidental proxy server'.  Some versions of windows install and configure IIS automatically.  Often you'll find PCs operating as proxies inadvertantly too. Often it's only when they start getting overloaded with traffic that network administrators notice.

there are 2 main reasons to host a web free proxy server: 1. advertising revenues (adsense, adf.ly and others) from website traffic; 2. personal data theft (email, usernames/passwords, credit card information andmore) from the clients. that's why, i always use a paid private proxy to surf websites like hulu, netflix or pandora. you should try http://proxyninjas.com.

Proxy server is a kind of buffer between your computer and the Internet resources you are accessing. They accumulate and save files that are most often requested by thousands of Internet users in a special database, called “cache”. Therefore, proxy servers are able to increase the speed of your connection to the Internet. The cache of a proxy server may already contain information you need by the time of your request, making it possible for the proxy to deliver it immediately. http://proxy-hub.com The overall increase in performance may be very high. Also, proxy servers can help in cases when some owners of the Internet resources impose some restrictions on users from certain countries or geographical regions. In addition to that, among proxy servers there are so called anonymous proxy servers that hide your IP address thereby saving you from vulnerabilities concerned with it.

Many of the "free" proxies are run by those who just want to gather personal information for identity theft or credit card fraud.  I wouldn't trust them at all.  I use a great proxy service that is very reliable, has multiple servers to choose from in the US, Canada and the Netherlands, and the subscription price is very reasonable.  They even offer a 7 day free trial so you can check it out for yourself.  See link below: http://www.privacypartners.com