John Nack, Senior Product Manager, Adobe Photoshop wrote that Adobe will be replacing Freehand with Illustrator. Adobe will continue to sell the current version of FreeHand, but will not do any further development and won’t release any updates.
Adobe has created an FAQ (PDF) that explains the details of the decision not to rev FreeHand, talks about Illustrator CS3 features added to make FreeHand users more comfortable, and more.
FreeHand Upgrade Path
A special upgrade to Illustrator CS3 is available to all registered owners of FreeHand for $199 U.S. This upgrade is available worldwide through the Adobe Store and through the Channel. There is no direct FreeHand to Creative Suite 3 upgrade, but FreeHand owners who also own Adobe or Macromedia products that are eligible for upgrade to the Suite can use that path to move to the Suite.