<p>I haven't touched sharepoint in years.  If I want to setup a development environment to get up to speed, what options do I have?  I don't have an MSDN license, is there anyway I can get up and running for free? (for development only)</p>

There is no way you can have a MOSS 2007/WSS 3.0 development for free but a
Microsoft Action Pact
is so cheap to get. :)
There is a nice blog to read to get the requirements and the steps to get a full MOSS 2007 image up and running here :
How to Create a MOSS 2007 VPC Image: The Whole 9 Yards
.