A thorough overview of the Windows 8.1 update can be read from this MSDN Blog. Some changes in the following areas are covered: Personalization, Store/Apps, Search, IE, and Cloud Connectivity - This last one is very exciting and can possibly be a file server + backup replacement, at least for smaller businesses.
Yes, Windows 8.1 is FREE. As it should be! After all, it is a revision, similar to a Service Pack.