When you download a book from Amazon, B&N or any other online retailer~regardless of whether or not it's free or costs money~that novel goes up in the sales ranks. With each download, it goes farther up the ranks with the optimum rise occurring when there are many sales in one day (the entire system starts over day by day so if a book sells one a day for a month it won't rise in the ranks nearly as high as it would if it sold thirty in one day of that month. VERY important key to remember!). Sales ranks are what determines the order that a book shows up in searches. Let's say you're looking for a YA fantasy novel. On Amazon's book page you click on Teens. Everything that shows up on the next page, and any more specific pages you click on (sub-genres and such) is determined by sales rank. The books that are on the main pages (getting there with the best sales ranks) get noticed and sell even more.
For each download of a free book, that book goes up in ranks too, getting it farther up the lists and onto the main pages where it will get noticed. When this happens people see not only the free book and are more likely to download it (helping raise it's rank and supporting the whole process) but they also notice an author's name and are more likely to check out there other books. That's one way a free book can get an author more sales. Another is, of course, if the readers enjoyed the book and come back to buy the author's other titles. So, crazy as it sounds, now you know there is a method to the madness.
That said, all this week for Valentine's Day week (and to help it's sales ranking ;) the eBook of The Secret of Spruce Knoll is free on Amazon! I hope you'll download it and spread the word. And a huge thank you to each of you that does. :)