Hey guys,
Im gonna try and explain this keeping it simple.....correct me if there are any discrepancies
The exhaust system of a car takes the exhaust from the cylinders to the end of the tailpipe where it is expelled.
Starting off at the exhaust manifold which combines the individual exhaust gasses from the cylinders,
That pipe leads to the catalytic converter, which causes chemical reactions with the exhaust gasses to make them more enviormentally friendly

read this for further cat-con info >
All Catalytic Converters - What Does A Catalytic Converter Do?
The output gas goes down a pipe to the muffler(silencer) which is required for cars to meet the noise pollution standards
Well that is a basic stock exhaust sytem.
Now what you have to understand is that even though we are dealing with gasses, there is still a good deal of pressure involved. Specifically backpressure. That is, the exhaust gas newly expunged from the cylinder has to push all the other exhaust through the manifold>pipe>cat>pipe>silencer. This is where the back pressure comes in, it provides a certain resistance.
A free flow exhaust, simply put, is an exhaust that decreases the amount of back pressure in the exhaust system and possibly also providing a smoother passage for the exhaust.
In my opinion, a free flow can have any/all of the following. A new exhaust manifold, providing smooth and equal length sections of pipe for gas from each cylinder (like the one in the first pic).
(Porting and polishing the head also helps the flow of the intake/exhaust gasses and is a mod, though not part of a free flow)
Pipes can be widened allowing more gas to flow. But keep in mind that theres always a right balance and backpressure seems to have its advantages.
The cat can be modified or removed all together. For example a certain evo6 in bombay was running without the cat at the autocar speedrun.
And the muffler aka silencer. This is where the most confusion can happen. Sometimes all you have to do is poke a hole in your silencer to make your car sound like its free-flowed. Its quite possible that 70% of the "freeflow" cars you see on our streets are actually just modded mufflers, giving the noise an the "feel" but no real benefit.
Importantly, keep in mind that huge amounts of research go into making a good exhaust system, its not just as simple as putting larger pipes and taking off the cat. Sometimes it can have a negative effect on the performance of the car.
As u must have figured, this can be done on carbed as well as mpfi cars.
After free-flowing your car, the gasses flow diffferently and hence your carb should be re-calibrated. And i can only assume that the correctway to do it with an mpfi is to re-program the chip ......(im not sure if there are enough sensors to calculate and adapt to the difference).
A good example of this is when your muffler cracks/rotts/falls off you will notice that your car starts to idle a lot faster (due to less back pressure)...
Hope i have managed to successfully convey this concept.
Let us know if you want to get further into this!
cheers
rehaan.