Yes I suppose they could in the future charge, but I don't think they will. The reason for this I think is, they are promoting better websites which they charge for, so this is a taster..anyway I have had a look at the "learn more" page and well here it is.
Attract new customers
Microsoft Office Live Basics is the easy way to get started on the Web. If you have always wanted your own Web site, Office Live has just made it easier — much easier.
Free domain name and Web hosting
Easy-to-use Web site design tools
500 MB of Web site storage space
25 company-branded e-mail accounts
Web site reports
Search engine advertising tool So to be fair it's worth a go