As others have pointed out, Microsoft has made available a free download of Expression 3, apparently acquired from Creature House. My first impression, having only played with it during breakfast and lunch, is that it's a very cool app. It has a standard, user-friendly palette-based UI with a few interesting quirks -- a good antidote to applications such as Digital Image Pro that favor a more “Inductive UI” style approach. ;-)
From reading the comments on Tim's blog I now notice that a note on the download web page implies it's for existing customers. When you install, the EULA doesn't say anything extraordinary, although it does call it a “Preview”, and there's a non-intrusive “Preview” watermark in the MDI client area. Until we hear more official communication, draw your own conclusions I suppose. (Or paint them using MS Paint, but that would just be a bad pun.)
On a side note, I'm a bit puzzled by how schizophrenic Microsoft has been in the graphics space. We built and discontinued Image Composer, Photo Draw, and Photo Draw 2000, and created Digital Image Pro, Picture It, and various image manipulation and drawing features in apps like Office and Visual Studio. We also bought Visio, and bought and sold SoftImage. Of course, there's MS Paint. And rumors about Sparkle. Am I missing any?