Yes, everything is free in both sense of the word.
The diference between different distributions is two big to list here, just search on Google.
Myth TV is a program used to watch and record TV programs on a computer. Wine is an Open Source implementation of the Windows API on Linux, you can't play 3D Windows games on it as Wine does not iplement Direct3D access. There is a service called WineX or Cedega, which lets you play Windows games for $3/month. And yes, Linux lets you cluster computers. Some games such as Unreal Tournament, Quake and Doom can be natively run on Linux.
There are an infinite amount of word-processors and browsers, you could again search on Google for different ones. The most popular are OpenOffice and Firefox.