Did you read it?
I'm sure you read the article before posting and of course noted:
"The three tools Redmond is offering are Visual Studio 2010, including a free Express version as well as an add-in for the full IDE, Expression Blend 4.0 for designers, and XNA Game Studio 4.0"
In other words, MS are giving away an express version of VS2010, as well as EB4 and XNA, that is 2 commercial packages and an express. MS have offered express versions (free) of c++, c#, web developer etc. for a very long time, and for a mobile you really don't require the full bells and whistles version of VS2010 anyhow, you pick your programming language (silverlight, design through EB4/VS2010E) and off you go.
Of course, if you're a student via Dreamspark you can get the full version of VS as well as develop xbox games for free, and a whole host of other neat software (including server 2008 R1). So, which part of free went over your head?
As for x-code, don't even get me started on that travesty of an "ide", I'd rather be a victim in Saw 7 than use that pile of junk.