There is a completely free version if all you need is word processing. But if you're looking for more features than that, then there are several options (Lite, Home and Medical editions) - they're priced differently and offer different options.
Yes, the word processor gives you the ability to enter rich text and add picture (as well as voice, plus you can attach any type of file to the entry). It's all just part of the whole package. And of course we have discounts and special offers as well.