When a player is won in a bid, you may then sign them to a 1 year free contract, meaning they will cost you nothing, but only on a 1 year basis until the game (Madden 09) officially comes out.
You may elect to not sign a player, possibly having won a bid for a player in the same position. You are not entitled to sign everyone you have won in a bid, but you do not get back any of the "bidding points" spent trying to win the Free Agent.