Valve has confirmed that DOTA 2 will indeed be a free-to-play game. Along with this announcement was the reveal of the DOTA Store which will handle micro-transactions in the game. Valve is insisting that purchasing in-game items won't be key to success, however.
The Store has been available in the beta which allows players to purchase items created by other users or by the developers themselves. All of the items in this store are to be cosmetic and won't affect the gameplay, which should re-assure those who are afraid that you'll have to pay big bucks in order to stay competitive. You can get in on the game now by purchasing the Early Access Bundle, more details of that are here.