Of course, blender is completly free (and more, it's opensource). The internal renderer now offers raytracing, ambiant occlusion, subsurface scattering but still not caustics for now. With blender you can use a lot of external renders (pov, yafray, kerkythea, indigo, sunflow,...)
Some rendering tries with blender :
http://www.graphinc.com/galerie/thumbnails.php?album=7
(I used Carrara before that)