Lots if interesting responses and food for thought in this thread! I don't have a problem with either the term "free day" or the term "cheat day". Perhaps "free day" does sound inherently more positive, but I like the term "cheat day/cheat meal" because it sounds more fun, and it almost implies a bit of delicious naughtiness (like you're being naughty in a good way, not in a bad way). I think most of us know in our heads that an occasional higher cal meal/indulgence/piece of cake/restaurant food/whatever isn't actually cheating, on our diet or on ourselves, or actually doing anything wrong, but it's fun to call it that because you get to feel like a bit of a rebel. I do think "cheat" is a healthy thing to call the occasional indulgence (as long as it stays occasional!) since it implies that you're developing healthy, moderate attitudes towards food in recognizing that you can "cheat" with the bad foods once in a while, but that "cheating" is a risky thing so it shouldn't be your every-day behaviour. "Free day" implies the same thing but I just don't think it's as fun of a term!
Personally, I'm not doing any cheat days or cheat meals at this point in my weight loss, because I'd rather lose 2-3 extra lbs per month than have a free day every week. If I end up plateauing though, I am definitely going to give a higher-cal cheat day a try, but right now I'm losing at a pretty steady pace and I think going over my calorie budgets every six days would only slow that down. I definitely understand why it works for people though and I think it's a pretty fantastic strategy. Once I lose my initial 15-20 lbs I will probably start incorporating more "cheats" as I transition into maintenance, but my main strategy for eating out, parties and special occasions is to work any extra indulgences into my plan by eating healthy and low-cal the morning and afternoon before the event (or even fasting), or just doing an extra 30 minutes of cardio.