Free software means no cost software, free using by everyone, like in 'free speech', correct? Ok, that is correct, but it doesn't necessarily mean free as in 'free beer'... Confused? You don't need to, as all this - and a little more - is quite well explained in the documents you can find bellow:
Here you have a very nice article explaining on how to 'pay' for free software and describing well what most people think - mistakenly - FREE software does mean...
And of course, there is the official Free Software Definition , from the The Free Software Foundation, that you could find interesting reading.