Previously,
freeware was
software gratis, as described in
The Jargon File's w/u in this node. The term "Freeware" has been much abused of late. It can mean just about anything.
Certain software companies offer "freeware" versions of their software. The software may be lacking features of the non-gratis version, and may be more aptly described as crippleware, or shareware.
The software may be fully functional, but contains bundled spyware. Although the software is gratis, you end up sharing your private marketing info. Is this software gratis? Kazaa's bundling of Gator comes to mind.
Some "freeware" shows you advertisements in the form of banners. This should be called bannerware or adware.