There will still be a free version of the game but you wouldn't have access to everything. The unlimited version that you would pay for just unlocks certain upgrades and you wouldn't have to deal with the add banners that the free version will have.
On the bright side, considering the continued sorry condition of many of the game features in the beta, it may very well be that someone playing the free version will find the game a lot more reliable and less buggy. Easier to make that limited set of features work right than the whole slew of features the unlimited access people get.
From what I can tell, Now that I have been testing the Basic Version (boo basic).. most of the features are there... but locked for your character NOT for everyone else around you...So I dont see that as helping the reliablity/bugginess of the game for basic players... Basics play right along side Unlimiteds.. so all the programing is still there...
The Story line quests are the only ones you can do in basic, but all the other quests are still there... Now I dont know once they open the game to the public, if basic users will not be able to even start other quests (right now I can start all the quests, they just show up locked...
I dont believe that Basic users will have fewer issues/lag/crash than Unlimited other than problems from the quest unlimited people have access too.