I guess that now I'm part of the VM team rather than being an "inside-outsider", I can blog this authoritatively. Not that it's the best kept secret in the world - it appears that someone from Microsoft leaked this information to several sources last week :(, although from what I can see, it was as publicised as "rumoured".
Well, the rumour is indeed true. From today, 3rd April 2006, the full version of Virtual Server 2005 R2 Enterprise Edition, both 32 and 64 bit, is free - there is no charge. This has a number of points requiring clarification.
First, the difference between standard and enterprise editions. They are, functionally, idential apart from the amount of memory and physical processors supported. Hence, in effect, there is no reason to continue using standard edition - it can be effectively considered a "redundant" product. Standard edition will no longer be available, but will be fully supported if you continue to use it. Of course the upgrade to Enterprise edition is pain-free should you choose to go that route.
Second is the why part. Although there are many reasons (see presspass site), the nutshell answer is relatively straightforward. If you look into the future of where we're heading with Windows Virtualisation in the Longhorn Server timeframe, virtualisation can be thought of as a "commodity" - commonplace, extensively used and most importantly free functionality out of the box. Windows Virtualisation will include full migration capability from Virtual Server 2005 R2 to Windows Virtualisation, so this is somewhat of a no-brainer to get people onto the next release.
More details can be found on the Microsoft Presspass siteThe home page of Virtual Server 2005 is here Download & CD Order Page can be found here
[Link to later blog entry about availability of Linux additions for Virtual Server 2005 R2]