Yes, the application is free and the package can be obtained through the official website: http://winnydows.com/en/downloads/
Note: Make sure you download the version corresponding to the architecture type of your processor (eg. 32 or 64bit).
Also, make use of the review written to this program: http://xvid4psp.software.informer.com/
To answer all your questions, simply use the images below to see all the available Video and Audio options.
What you see in the images are the features supported: