wow we are having a really interesting and productive discussion here, i'm loving it. and i really like the cooperative spirit of the discussion, trying to figure out new ideas while remaining true to the idea of being good to the users while helping the site.

Once a new version is out, users must either upgrade or donate or be bugged every month to get a new temporary license.
That's an unusual and intriguing idea -- my favorite kind!
I don't think you actually have to *force* them to upgrade but the point is still the same -- you could combine the REMINDER TO UPGRADE with the REMINDER TO CONSIDER DONATING.
By combining these two messages, it might make it much
less of an annoyance, while still being a
MORE EFFECTIVE request-to-donate (since it will come at a time when they are likely to notice our improvement of the program), which is basically a
win-win situation.
Regular users who are pro-actively updating probably are already paying enough attention to us and are conscientious enough not to really need much reminding.. and i suppose you could always still show a quick "please consider donating" message when there is an available update..
This could be done with or without changing the free license key policy -- i.e. if we were feeling brave we could eliminate the need for anyone to get a free license key, and simply put this new idea of reminding people to consider donating during update checks or downloads, into effect instead.
So what are the downsides.. I guess the main downside is for programs that don't get updated very frequently. Such programs are sometimes but not always less substantial than those that do, and this idea would seem to put those programs in an awkward situation where they aren't donated for much.
On the other hand there are a couple more advantages i can see to this..
One that I love is that, even authors who don't use the License Key system could put this reminder-to-consider-donating-TO-THEM into their update checker. I could easily put it into the dcuhelper update checker tool that many of the Coding Snack authors use. That might help these authors get more deserved direct donations. I love that idea -- and it also would mean more donating and participating members on the site in general, since there are a ton of users of these programs that don't even realize where the programs came from.
Verrrrrrrrry interesting..