As I understand it, MS will be working with PC makers to have a free, stripped-down version of Office , called Office Starter, installed on new PCs. But, the full version will not be free. Users can easily upgrade from Office Starter to a full version.
The new focus on web-based Office apps is what I found particularly interesting. For example, two persons at very different locations would be working together on a spreadsheet application where both parties are viewing and updating the spreadsheet via their web browser.