Linux is freely available (see "OPEN SOURCE?") software originally created by Linus Torvalds (but is now contributed to by many people).
Linux is an Operating System. It is sometimes referred to as a Network Operating System. Technically, it is only the kernel, but the name often refers to the entire Unix-like environment. It is multi-user - more than one user can be logged in and using the system. It is multi-tasking - more than one process can run at the same time.
Linux runs on several different platforms:
Linux can interact with many different environments:
Most, if not all, distributions come with everything you need to create an Internet server, file/print server, graphics workstation, desktop PC with graphical interface, and more. It has its own graphical windowing interface (X Window), which comes in many versions such as KDE and GNOME.
If Linux is free, why do I have to pay for it? As with other Open Source software, Linux is "freely available." This generally means that there are ways of acquiring it at no cost (other than an Internet connection, for example). It also generally means that other people can package it to sell, usually as long as the source code and appropriate copyright notices remain intact, but this varies.