Thanks to Ben Armstrong for the information!

1. Microsoft announced that Virtual PC 2004 SP1 is NOW free and can be downloaded and used today!
2. They also announced that Virtual PC 2007 will be available for free sometime in 2007, and with added support for Microsoft Windows Vista.
3. In addition, Microsoft says Windows Vista Enterprise customers will have the right to install four copies of the operating system on a desktop for a single user.

Microsoft announced "Whether Microsoft virtualization technology is an important component of your existing infrastructure or you're just a Virtual PC enthusiast, you can now download Virtual PC 2004 Service Pack 1 absolutely free. Microsoft is also offering the free download of Virtual PC 2007, with support for Windows Vista in 2007."

Ben attempts to answer two potential questions before they are even asked:

1. Why are you giving Virtual PC away for free?
   Microsoft views virtualization as a tool.  Virtual PC is used for a number of reasons, but the primary reasons are for development and test scenarios and application compatibility.  We already provide Virtual PC as part of MSDN for development and test users, and given that all our other application compatibility tools are free - charging for Virtual PC did not make much sense.
   
2. Is the Windows Vista Enterprise licensing right restricted to Virtual PC?
   No - you can use any virtualization software for this.  In fact - you do not even have to use virtualization software to exercise this right.  You could - if you wanted - setup a quad-boot physical computer and be licensed for all four instances.

Check it out for yourself, grab it here.