If you are using a service you don't pay for, it's because they're selling the information they collect about you...
Not always. Look at Dropbox. 95% of their users get it for free, and they get great support and (as far as I know) none of their information gets sold. The idea there is to get them hooked on the product and want to upgrade later, but if you're content using their free service (which tens of millions of people do), you aren't a product in any way.
Here's the short lesson for them: Users on the internet expect to get their content quickly, not necessarily for free. Organizations (and ill-informed people such as Bill Maher) confuse that with users wanting to always get their content for free. The primary motivation for piracy is a lack of a legal alternative.
Napster --> iTunes is the perfect example. Once Napster launched, it seemed that people just wanted free music. Granted many did, but if you give people an easy way to legally purchase music they will -- to the tune of roughly 20 BILLION songs song on iTunes. Do the same with movies, instead of these horrible "windows" and geo-restrictions, and the same thing will happen.
Be careful with statements like "An iPad can do much more than a Xoom". While the iPad is a better choice for most folks, and certainly has more apps, there's quite a bit that the Xoom can do over the iPad -- vastly better Gmail support, Google video chat (even over 3G), widgets, much better customization, etc. While you can argue about the usefulness of widgets on a phone, they're amazingly useful on a tablet.
I think the iPad is selling better partially because of the apps, but largely because of the cool factor. For many people, tablet = iPad, and that's the end of the story.
While I agree with the sentiment of the article, the facts aren't quite right.
Sarah Palin's public face on Facebook is a "Page", which by definition can be handled by multiple users. As long as they're not logging into her personal account, which they'd have no need to do, I don't see how this would break the TOS. They can log into Facebook as "Bob" and "Judy", and as long as they have admin rights on her Page then it's not a problem.
If you want to find violators, just look for any small business or church that's on there as a user profile (rather than a Group or Page), which is a clear TOS violation.