I think you're right. Confusingly, Garmin offers two traffic monitoring services. One of them through MSNDirect over the FM airwaves. That one is free, with the purchase of a Garmin unit that supports it. They also offer XM NavTraffic, which works through the XM satellite network. That one does have a subscription fee associated with it.
I haven't used either of them, so I'm not aware of the differences/pros/cons of each, or even how well either of them work to help you take different routes.
More info
on Garmin's site right here.