Chatter Free is an extension of the Chatter product line and operates around an invitation model, so a licensed Salesforce user can invite non-licensed colleagues to use Chatter without incurring additional costs. The model is designed to help accelerate the user acquisition process for the social collaboration platform.
Those who get invited into the Chatter Free experience can create profiles, post status updates, consume feeds, share files, participate in groups and use the Chatter Mobile and Desktop apps just like their Salesforce-licensed coworkers. Chatter Free users are not gifted with the more premium features of the app, however. This means they can't do things like follow accounts, get reports, have access to calendars or employ custom objects. These features can, of course, be enabled by upgrading to a Chatter Plus license costing $15 per user, per month.
Chatter Free is really a crafty marketing maneuver dressed up as a product launch. There are certainly company benefits associated with the release of the free version -- ensuring all project stake holders can use the app is a biggie, for instance. But Salesforce, which competes with Yammer in this space, will likely be the real winner as long as it can successfully convert Chatter Free users into paying customers.