The Legacy edition of Gmail, which was free to all Google customers who registered, offers you incorporation with all of Google's other products and services such as their business apps, Google Drive and Google Docs. The Free version of Google Apps gives you 15 gigabytes of email and IM storage. That storage is shared by your docs and images as well as your Gmail. You are limited to 25 megabyte attachments on your email (which is the same as the Gmail editions for business and unlimited versions of Gmail. You are also slightly more restricted on who you can send your Gmail to with only 500 recipients per day per user, as well as only 500 recipients per email that you send out. This prevents a great deal of spam being sent but may also restrict you if you're legitimately using it for business.
The legacy or free version of Google Apps also permits you to use mailing lists, additional addresses per user, but does not permit user controlled mailing lists. In addition, custom email filtering and virus blockers are available in the free or Legacy version just as they are in the business and unlimited editions.
What's the biggest difference between the free Google Apps of yesteryear and today's Google Apps for Work?
The difference isn't so much space or size or storage, but functionality and it's a functionality that you're probably going to need as your business moves forward.
The Google Apps for Work brings you more integrations, more administrative controls, unlimited and user controlled mailing lists, the option to disable your IMAP and POP3 access and imports from MS Outlook as well as Lotus Notes. The legacy free version of Google Apps does not give you the ability to migrate from Microsoft Exchange or Lotus Notes, nor does it allow you to use inbound and outbound gateways or email routing.
One other thing that the Legacy version doesn't offer is the means to disable the Google Ads that you'll see showing. The business and the Unlimited version allow you to remove those and use your email ad-free.
All in all, the legacy or free version of Google Apps is absolutely a bargain, however it may be inadequate or slightly too restrictive for a mid-sized business to use for their company email.