Actually Unity's 2.x branch was released autumn 2007 and all the updates were free afaik. Just the free Indie version is pretty young so I don't think there's a totally short upgrade period but a pretty reasonable one (I don't know anything about upgrade pricing though)...

Concerning Unity itself my opinion is that it's the by far better choice when you actually have a small team and want to get serious. When your goal is a game you can sell those investments for a full license shoulnd't be a showstopper. For Lone Wolves or people on an extremely tight budget ... well I think those have to choose for themselves which engine they like better. I'd prefer Unity over 3DGS right now especially when having in mind that the 3DGS development seems to have about stopped except for some MMO capabilities which might make it into everyones engine due to their work for those guys hiring the Conitec devs to help them on that task. Without wanting to be dismissive I still don't really understand that move neither from the client side choosing 3DGS as basis for their MMO nor from Conitec thinking that this is what is the way to go for this engine but maybe it's a pretty profitable job. Anyway in my opinion 3DGS is designed for newbies, hobbyists and Indie's taking their first serious steps. MMO really isn't compatible with this as sort of the "champions league" of computer games both in terms of know-how or difficulty as well as money to run your servers. But oh well maybe they'll surprise us all...