You need the $100/year subscription to create XB 360 games. I also believe anyone your share you game with needs the same.
For the PC its just a layer of abstraction for DirectX and you are free to release and distribute games written in it, people just have to download the XNA framework to play.
I looked at it briefly. GameStudio express is just C# Express with a couple of extra application templates. XNA is definitely a step forward from Managed Direct X 9, however its still looks overly complicated. The SpaceWar sample is a horrible introduction - thousands of lines of code for a very simple 2D shooter BLEH. Hopefully they will build a strong community with some good simple tutorials, though MS seems intent on making you pay for that stuff.
Check out Irrlicht - http://irrlicht.sourceforge.net/
With it you can load and render a Quake 3 map, with a mouse-controlled camera, with collision detection, in just one page of code.