The MekTek.net Development Page has a status report on the planned free release of MechWarrior 4 (thanks Hump). There have been some complications, but there still is optimism that a release nears:

The Mechwarrior4 FREE release is still currently to be announced. MekTek had hoped to gain permission for the release while visiting Smith and Tinker, Inc. in Seattle this week. However, we have learned that Microsoft has endured several administrative changes which currently impede the release. The good news, however, is that a meeting to finalize the release is scheduled near the American Thanks Giving Holiday. Smith and Tinker said that it will only take 1-2 more days before permission is granted. From MekTek, we are happy to report that the release is ready and awaiting permission to push that big shiny green release button at MekTek headquarters.