I agree with everything that has been said about letting people take advantage of our desire to build and perform by lowballing us on the budget. It is all completely true. Having worked at various levels of film and television, it very rarely is about paying people what they are worth until there is already a lot of money made. And even then, it's going to trickle down from the top.
On the other hand, though, there are occasionally projects you believe in. I don't think there is anything wrong with occasionally (did you notice I've used the word "occasionally" twice now? Gotta stress that) doing the work because your best buddy has a no-budget project and he really wants to work with you and you like the idea and you have the time and it is going to be a lot of fun. Or occasionally, when you are just starting out, doing something that will be good for your resumé or portfolio. It should never be a big project like Onath talked about (good on ya', there Onath!) and your share should be commiserate with the budget involved. And there are a bunch of other things to consider like who owns the character and the design, what kind of credit you will get, where is the project going to be seen, etc.
I think the times you put in the effort for low and no budget projects that you don't own or control should be few and far between (did I use the word "occasionally" yet?). We all want to make professional level money but we don't all have professional level skills or reputations yet. YET. I don't believe in the "paying your dues" argument. If you're good, you deserve to get what your worth no matter how long or short a time you've been doing it. But it does take time to build a reputation. So, if every once in a while you accept less than top rate for your work, every once in a while do a project because you are going to enjoy doing it, every once in a while you want to show that you work and play well with others, then I don't think there is anything wrong with doing just that.
On the third hand, I don't even have to wait for the post on the counter-argument, I can tell that story right now.
Last year, I built and performed a coffeemaker in a play. I kept the design and the puppet, that specific character name remained with the writer/director but I kept the basic essence of the character. I had fun doing the show, made some new friends, and did a lot of drinking with the cast so, overall, it was worth it.
The writer/director and I became friends, hung out together a lot. He had taken apart a stuffed bird to make a puppet character for himself that he had used in a couple of stage shows and has begun to use in shorts on YouTube. He eventually moved to L.A. and wanted some new versions of his puppet, a more professional style. His character, his design, he just needed them built.
I think he was expecting a quote that didn't exceed two digits to the left of the decimal point. But I had done the freebie thing for him once, had given him a lot of advice about moving to L.A. and I still kept the price for three puppets and a couple of costumes under $1000.
He sent me an email about a month ago saying he would think about it. Haven't heard back from him yet. So doing the freebie didn't payoff in the long run.
I guess my point is, don't let anyone lowball you for your work but I think it is alright to occasionally do something you love just because it is something you love to do.
Edited to add: Watched the Harlan Ellison video and also another interview with him while he was picketing for the WGA strike last December. He's right, of course, but he is a complete nutwad!