No, the Hop On/Hop Off buses aren't free. I think they're about 25 euro for a two day pass. There is a red company (the same one that's in London etc) and there's a green company. Honestly, if you're just looking to stay in the city centre, don't bother with the hop on/hop off. The city centre is so small that you can walk to most of the places that are on the bus tour, even Guinness if you're feeling peppy! If you do want to get the bus, you can pick it up on Suffolk Street, just across from the big Avoca store. There is also a visitor's centre on Suffolk Street (it's in an old church).
I agree about the Porterhouse. They definitely have the best selection of Irish beers and their food is delicious. I would also recommend the Stag's Head (try to get a seat in the snug) or Grogan's (for pints, no food), both are in the city centre. And yes, expect to pay 5-6 euro for a pint. Even the Long Stone (another good pub) will charge you a fiver these days. It is Rip Off Ireland after all!