Workflow Option in MS Sharepoint Designer 2007 SP1 MSO   

I do not see the Workflow Options when I click on New. I have created a 
'site' locally on my desktop and its open when I click on "File > New" for a 
workflow option. Can you please advise if "Workflow" is an optional (paid 
for/lic. separately) feature that is not  available to me or should it come 
as part of the basic Software?

date: Tue, 17 Jun 2008 17:10:01 -0700   author:   WF_SS