I just downloaded the app, and it says that you need to set it up via icloud. Will this cost me money? I was under the impression you just download this app, turn it on, then if you lose it, you log on to another ios device.
Once you turn it on you have to enable restrictions under settings/general. Once enabled, lock your location and accounts. This will stop a possible thief from simply disabling it from you finding it.
The Find my iPhone app is used to find your iPhone. It is not the service that provides the location. The service is setup within the Mail, Calendars, Contacts settings.