This sounds like the most fun input method, and it is, but it is far from accurate. The freehand input lets you doodle. You hold the mouse down and drag around. Where you went gets smoothed out and turned into a curving path. You can click for a line to a point, and then drag along some more. You can drag and release any number of times to create lengthy and intricate paths if you wish.
This is useful in practicality only with the Run stitch type. Drawing freehand on a computer requires practice, and the more fluid your input is, the better the result will be. Do expect to spend some time cleaning up your handwriting!
As with other input methods, right-click to end your input. Holding the ‘Ctrl’ key when right-clicking will close the shape.