Ed Felten has a good piece on how the Radiohead experiment can mean they make more money by selling more at a lower price. While I agree with his analysis I think this focus on how the 'you choose the price' model will work misses the point. This is a step along the path to free content so all those who think it's a failure if some people don't pay are looking at it the wrong way - some might pay this time, but next time? Or the time after? Radiohead have a reasonably devoted fanbase who will opt to pay, but for lots of artists that isn't the case - they'll make the choice between fame over fortune. Better to have 1000 people download it for free and generate some buzz than 10 people pay for it.
So the question isn't will Radiohead make money from this release, but rather 'how else might Radiohead make money?' They are offering a proper CD release box set for around £40. This is one model - release for free something that 90% of people will take, and something special for the remaining 10%. This is the sort of thing Gran can buy them for Christmas - 'What does Kevin like?' 'Radiohead' 'Okay, I'll get him the special release'. I would expect to see lots of variations on this - most of an album free and then some special DRM locked bonus tracks you pay for, bundled with some video, interviews, etc. People will crack these and release them free, but for the fan who really wants them they'll be prepared to pay and the rest of us will just take the free stuff.
PS - you may be thinking I am contractually obliged to mention Radiohead in every post at the moment. This is the last one. Probably.