It's a bit confusing... technically the DX+ upgrade IS free, however you don't get all of the content with the upgrade as alot of it is optional extras.
Assuming you've already purchased Pac-Man CE: DX, then when you next launch the game (whilst connected to Live) there's a title update (20mb) which will prompt to download.
This is the update that turns DX into DX+ and it adds the new medal challenges (but no new achievements), a couple of new level options, the improved score comparison section, and the overhauled game menu layout. This is all free.
In addition to this there is optional additional DLC content which has to be paid for (there's a DLC menu on the new DX+ main menu):
The DLC items are:
Big Eater Course - 160msp
Mountain Course - 160msp
Championship III & Highway II courses (bundled together) - 160msp
DigDug game skin - 160msp
Rally-X game skin - 160msp
Pac is Back! skin - 160msp
Pac-Steps BGM pack - 80msp
Re-Entrance BGM pack - 80msp
There's also the "All-in-One pack" which basically gives you a discount on buying all of the above together - this pack costs 640msp