Will I get automatically lifetime FREE updates if I pay for an app? If I buy a paid app, will I be able to get free updates for the rest of the lifetime of that app or should I pay later for the updates? 

What's the norm? Can you perhaps give 1-2 examples? 

Thanks!
If the developer keeps releasing updates to the app as the same packagename and you already purchased the application previously, then should receive updates for the application for free.

E.g. if you went and purchased my app then you should get updates so long as I keep updating this specific packagename of the app: net.mandaria.cardashboardpro

However, I could at some point in the future decide that I want more money for the application and release a newer version of the application under a new packagename: net.mandaria.cardashboarddeluxe You would not get a free update to this app, even if it is technically the same application, I have chosen to release it as a separate app in the eyes of the Android Market (which determines two applications to be different solely by their package name).

However, I could still charge you for more money by including (optional?) in-app purchases or subscriptions that did not previously exist without changing the package name.  Carrying the same example, I could still use net.mandaria.cardashboardpro but have an in-app purchase for the "deluxe" features.

Most developers will not do these things to users who have already purchased their application, but it isn't impossible. Once such example of a developer trying to charge for a newer version of his application was psx4droid. The backlash was so vicious from his users that he went back and updated the older (version 1) of his app to the newer version (version 2).  He now has to maintain three versions because of this (version 1 and 2, plus a free version) instead of two.  Talk about a developer headache.

So ultimately it depends on what the developer decides to do.  In the majority of cases, the developer will keep supporting the same app and you receive the latest updates for free after your purchase.