Keyword Tool finds you long-tail keywords using Google's autocomplete API. The best way to use it is to enter 10 top keywords for your online website and run a standard search to let it find for your 10,000+ long-tail keywords that you do not know about.
Typically you would look at the monthly search volume number. This gives you the total number of times this keyword has been searched in the last month. If you are selling products, then looking at the CPC data is useful, because a higher CPC keyword likely means higher sales. The competition number is useful for those who run PPC ads.
No. Keyword Tool is free software and will always be free. As we work on more features, we will continue to add them to the free software.