A producer will often tell you that your script is pretty good, but needs you to rewrite it a bit before he'll take it on. For free. Should you?
If you've got someone else who will option or buy the script without a rewrite, then of course the answer is no. Except in rare circumstances, go with the bird in the hand.
On the other hand, if that producer is the only interested party, then ask yourself if his critique seems right. Will the producer's comments make the script better if you rewrite it? Then why not do the rewrite? You've got the script this far, why not get it to the point where someone can do something with it?
But if the producer's comments take the script in a direction that will only benefit that producer ("I really need this skiing movie rewritten for Puerto Rico"), then you should not do the rewrite unless you're paid for it.
There's an ancient joke in show business:
Q. How do you tell when a producer is lying?
A. His lips are moving.
I used to work for a producer who would say he had "practically all the money" to finance a movie project. That meant that he thought he knew where he might be able to get the money. You can never trust anything a producer tells you about whether he has all his financing in place, stars interested, studios just waiting to read your script, blah blah blah. What you can trust is the producer's self interest. He's not going to ask you to rewrite the script in a given direction unless he thinks he can do something with it. So, if he knows what he's doing, his comments will make your script more marketable. What you need to decide is whether or not it's worth your time and effort to do the changes. Treat his feedback as you would any other feedback. If it makes the script better, great. If not, tell him you think his ideas are very interesting and you'll take a look at it. ("I'll take a look at that" is how writer's politely say, "I think that's the dumbest idea I ever heard, right now, but maybe I'll like the idea better later, and I really don't want to upset you.")
Hah hah hah hah hah hah hah hah hah.
How do you tell when a producer is lying?
Never, ever work on someone else's material for free. This is what the WGA calls writing on spec - confusingly, it is entirely different from writing a "spec script" - and it is banned by the WGA. Follow their lead. It costs the producer nothing to ask, so you have no way to know if this is a project that will definitely go ahead or something the producer thought up this morning and will have forgotten all about by the time you've written what he wanted. (By the way, there is no such thing as a project that will definitely go ahead.)
If a producer has a truly brilliant idea, then you can make the following deal. He assigns you all rights to his idea. In exchange for that, you write the script, and grant him a one-year free option to buy the script from you. That's fair. You get a brilliant idea, he gets a script, and after a year, you're free and clear.
Otherwise, working on other people's projects for free is just a big fat time-waster. Never, ever do it.