Do add-on domains affect performance of other websites in your hosting plan?
Also, do you know about 000webhost.com?
They seem to offer free hosting without ads unless I'm mistaken.
'Add-on domains' will not effect your performance at all.
Not sure about them but have heard the mentioned here before. Just remember you get what you pay for. You may have problems, it is better off just paying for a propper host, they are cheap enough these days.
Try www.icreatehosting.co.za. Our packages start from R20 p/m. You get the latest CPanel control panel, great support and loads of free applications like Joomla, Wordpress and MUCH more.
The question you're asking very much depends on how your site is setup and what load its currently getting. Further more the application that you running and how its coded affects how it and other sites using the same application pools respond.
In a nutshell, a few add on domains / applications to a site receiving average load (5000 hits per day) should manage fine.