The Internet loves free games. Let's face it: Half of the reason piracy exists is because there are many free games that are flat out better than many of the $60 offerings from the modern video game industry. Cave Story, N, and the absolute glut of free-to-play MMORPGs demonstrate this to a fair extent. The problem begins when you try to monetize these games, which often results in integrated advertising or paid extras of some sort. N+ did it right, with new levels, a new style to the graphics, and the right mix of platform choices. Cave Story was initially getting a PSP port, which promptly died in rights issues, followed by a glut of fan-made, homebrew ports, and is now apparently coming to WiiWare with unspecified extras.
Of course, Internet-favorite creative tool Line Rider, having produced a wide variety of epic pieces of moving art, had to get monetized somehow in Line Rider 2: Unbound. The implementation method ends up leaving quite a bit to be desired, in no small part because the developers decided to doll up the work as a sequel, and then promptly tore out the magic of its creative potential in favor of adding gameplay and goals.