Good on ya Ving. I remember similar situations where I decided for many reasons it was best to give free usage of the images, it's all for the best as you say.
It's a shame people don't value photographs much, not enough to offer money straight out anyway! But it works both ways... I thought I valued photographs until I recently paid a pro for some portrait photo's of my fiance and I, and realised I had no idea just how much photo's are apparently worth!