I've been looking for a free hosting service with decend space/bandwidth that would allow external links, like, if we put a link to a file from our account on another site, it'll works instead of saying stuff like "you're trying to download file.zip from somehost.com/mysite. click here to be redirected".

what would you suggest? :-?

You can check out my hosting service, x10Hosting.com. We would be proud to host you, so long as the content you are linking to is NOT against our terms of service. Here is some information about our plans:

x10Corporate
Space: 2500 Megabytes/2.5 Gigabytes
Bandwidth/Transfer: 45048 Megabytes/45 Gigabytes
FTP Accounts: 5 FTP Accounts
Email Accounts: 15 Email Accounts
Email Lists: 15 Email Lists
MySQL Databases: 5 MySQL Databases
Postgre Databases: 5 Postgre Databases
Subdomains: 5 Subdomains
Parked Domains: 3 Parked Domains
Addon Domains: 3 Addon Domains
Control Panel/Features: cPanel 10.0.0, Fantastico DeLuxe, RvSkin

x10Advanced
Space: 1,000 Megabytes/1 Gigabyte
Bandwidth/Transfer: 20,480 Megabytes/20 Gigabytes
FTP Accounts: 3 FTP Accounts
Email Accounts: 5 Email Accounts
Email Lists: 5 Email Lists
MySQL Databases: 3 MySQL Databases
Postgre Databases: 3 Postgre Databases
Subdomains: 3 Subdomains
Parked Domains: 2 Parked Domains
Addon Domains: 2 Addon Domains
Control Panel/Features: cPanel 10.0.0, Fantastico DeLuxe, RvSkin

x10Static
Space: 100 Megabytes
Bandwidth/Transfer: 3,072 Megabytes/3 Gigabytes
FTP Accounts: 1 FTP Accounts
Email Accounts: 1 Email Accounts
Email Lists: 1 Email Lists
Subdomains: 2 Subdomains
Parked Domains: 1 Parked Domains
Addon Domains: 1 Addon Domains
Control Panel/Features: cPanel 10.0.0, Fantastico DeLuxe, RvSkin

but its not free, is it? :-?

It is completely free.

then what's the catch? :-?