Steam is an application run off of your desktop. After starting it and logging in you have the 'store' tab and 'library' tab.
90% of PC games (All of Novalogic's catalog, too) are in the store. Every week there's a midweek madness sale on a certain game series, almost every weekend there's a weekend madness sale on another series, and every day there's a sale on a single indie game.
In the library is where you see all of your purchased games show up, if you prefer not to need the steam window open to browse your games you can create shortcuts to the desktop just like normal CD games.
Yes it supports LAN, you can log in in offline mode. No, the servers and server browsing are specific to the games, not steam itself, all the games have a community that host servers anyway.
To see all the free-to-play games go to
www.steampowered.com and in the genre tab, free-to-play is its own genre.