Yes, it is. 

Free AOL.com 

AOL Online is now completely free AS LONG AS you have your own connection. Net zero, broadband, DSL,  Cable, etc. Free AOL is only for people with some OTHER means of accessing the Internet. If you have AOL and a high-speed connection through some other provider, you can "go free" and pay nothing for AOL. But if you need the dial-up connection from AOL, you can still save a chunk of change. Switch your plan from the standard $25.90 a month to the $9.95 a month plan, and you can continue as usual.

If you do not have an AOL account you can create one via Free AOL.com, download AOL and chose the correct payment plan (free.)

I'm a paying AOL customer and I can't find the option to switch to free from my paid account anywhere?

Just go to Keyword: Change Plan on AOL and click the Free button. No strings attached, no "customer retention specialists" to talk with. Nothing to install or download. Anyone with a connection to the Internet can get a free AOL account. If you canceled your AOL account in the last few years in favor of broadband, you can even get your AOL screen name back.

 Is it true the free service is littered with pop-up ads and spam e-mails?

No more spam than usual. (And if you are an AOL user, you know exactly what I mean.) Since AOL added spam controls a good long while ago, you can pretty much be rid of it. 

There are the occasional pop-ups from AOL itself asking for your opinions in polls and e-mails sent from AOL themselves advertising themselves. A small price to pay for free in my opinion. In the year+ using free, I have not noticed any other untoward pop ups or advertising. That's only my experience, feel free to ask around. 

Is it true I don't get any customer support via Phone with free AOL?

It's true. Just like you don't get any customer support via the phone with your Yahoo!, Google,  MSN, Myspace, Freewebs,  or any other free service.

So, should a paying customer switch to free or stay? I'm confused?

This entirely depends on you, your computer knowledge, if you think you need phone support,  and whether or not you can afford to keep paying for it or not.  

If you are not computer savvy at all and do not know anyone online or in real life that you can ask for help should an issue arrive, then I would advise that it would probably be best to stick with your paying plan.

Is this F.A.Q missing something important, or do you have more to add to it? Please send me a Private Message, be glad to edit it. :)