You can see MS's point of view with regard to the product key. Once apon a time, you could copy Office onto a load of floppies and have a working copy without paying a penny. Thats why there is a product key, so that you know (and they know) its the real deal (its not unknown for some retailers to sell a ripped off copy as the real thing). If it cost £20, then I'd generally wonder where it came from.
You can use Libre Office, Open Office, or a load of other similar free packages, but be warned that you kind of get what you pay for. I still use Open Office on my desktop, but its not quite as easy to use as MS Office, and is a lot slower on an older machine (version 3 is a memory hog). Its certainly fine for the occassional letter, spreadsheet, etc, but I wouldn't want to use it all day for work. On the other hand, the basic Office Excel thats comes with Windows 7 doesn't freeze panes, while Open Office does...
Thunderbird is really good, and I used it for years (better than Outlook). The only reason I don't bother now is that my ISP has all my emails online, so there is little need for a seperate programme to read emails.
Firstly, find the product key (in fact always a) keep the packaging and b) write the keys down on everything), and if you can't, then go for the freebies. Or buy another copy of MS Office if you can't do without it. Good luck.