Asia & Pacific
I'm living in Japan (a part of Asia & Pacific) and using Kindle since last Nov. I've been enjoying a lot of $0.00 books from the beginning, so "free books are $0" change should be before Nov. 2010. I believe I usually pay $2.00 delivery fee for non-free books.
I sometimes (not very often) see non-free books with prices below $1.99, however. An example is a book by famous Amanda Hocking (My Blood Approves, in particular) I bought recently, and it was $0.99 for me. Her other books all appear as $2.99, though.
I guess Amazon sometimes waivers delivery fees of some selected books for some reason.