Read between the lines...
The service is free, but Google will start to offer a premium service with larger storage, ad-free and with support at the end of the year.
The offer will most likely be more substantial in the future, with the addition of Writely, Google Spreadsheets and other applications. Google tried to be more attractive for corporate users by creating enterprise versions for Google Desktop and Google Toolbar, but without much success.
1. Google will price the optional services in a model that strongly incents organizations to use the ad-supported versions, since that's where Google makes the vast majority of its income.
2. Cobbling Writely, Google Spreadsheets, etc. will fail to displace traditional desktop productivity apps in approximately 99.9999% of organizations.
3. This is ultimately about Google's bet on what constitutes "good enough" enterprise messaging, and in that context it faces some focused competitors, e.g., Scalix and Zimbra, which offer attractive ROI/TCO/etc. for organizations that do their homework.