As we all know, Linux, BSD, and a host of other operating systems have been "free" for years, if not for their entire existence. Sure, there are for-cost distributions backed with support, but the fact remains that you can grab an ISO off a mirror site and install a Unix-based OS on any hardware you like, physical or virtual. With Apple's announcement that OS X Mavericks will be a free upgrade, we can add the Mac OS to that list -- though you still technically need Apple hardware to run it.
Hackintoshes aside, this is an interesting move for Apple, as it leaves Microsoft Windows as the last for-cost operating system holdout in the desktop space. Microsoft's business model will make it hard for the company to follow suit, as it doesn't have the advantage of profiting directly from the hardware sales underlying its OS. But it seems to me that Microsoft will have to reduce the price of Windows substantially to counter this move by Apple. It's hard to justify $100 plus for a Windows operating system upgrade when the competition gives it away in a seamless online upgrade.
This move by Apple may also legitimize desktop Linux in the minds of many casual users. I know, I know -- we've been hearing about the Year of Desktop Linux for, well, more years than I can remember, but it's never materialized. Yet we now have three major choices for desktop operating systems, and only one will cost you.
For those who don't wish to pony up for Apple hardware, the cost of Windows may very well push them toward at least trying Linux. Many desktop-focused distributions are making it easier than ever to transition to Linux. Coupled with the widespread disdain for Windows 8's interface, it may be enough to truly open up desktop Linux to the wider mind share it's always needed to succeed.