Mine get serviced now when they show signs of an issue. The few times I was proactive in having them serviced, they either always free flowed on first use, or on one occasion, fell apart during a dive.
I have seen what happens with the so called "free parts" annual service offered by some manufacturers. Primary/Secondary reg cost is around $90 (no parts). Very little was done for the $90, checked operation, checked intermediate pressure, checked hoses. 5 min work and a nice $90.
I have only had a few issues in all the time I have been diving, free flow due to bad manufacture of primary reg, minor free flow due to age (5 yrs before service), minor free flow after service, part of reg fell apart after service. Had all my regs serviced once before a major trip and then readjusted some secondaries to prevent free flow after service. Haven't touched them since and they all work fine.
I would suggest that if regs were so finicky that they required servicing every year or there was a good chance they failed, it would indicate poor product. I have 10 sets primary regs and maybe 12 secondary regs and all work as designed. Had them from 3-10 years and non have been annually serviced, and get serviced as required. No catastrophic failures to date, one free flow on deco reg.
In saying that I do check my gear (mouthpieces, diaphragms, hoses). Particularly before an overseas trip. Signs of wear may indicate a future problem, but I don't believe that it means you have to disassemble them yearly. It does however make the LDS that much richer. I am very particular now where I get my gear serviced. After some very disappointing efforts from so called LDS experts, I carefully chose who plays with my gear.
---------- Post added March 2nd, 2014 at 07:32 AM ----------
I find it offensive that some LDS owners crow on about annual servicing to ensure they drain the maximum amount of money from unsuspecting new divers, and then happily rabbit on about how little they had to do (did) for the "Annual service". Apparently an annual service means "I have checked it and its fine" leave the $100 on the counter please.
When mine are serviced I expect all the old parts back as well as the gear. I also find it offensive that they replace a perfectly good mouthpiece and then have the gal to charge $25 for an $8 mouthpiece (was same guy who serviced my primary reg and the back of it fell off on the next dive (luckily it was the environmental seal and not the guts of it). On complaining I got no reply to date.