Rangers Offer Arbitration to Lee and Francisco
The Rangers have offered arbitration to 2 of their free agent players: LHP Cliff Lee and RHP Frank Francisco. Texas did not offer arbitration to DH Vlad Guerrero and C Bengie Molina.
The Rangers expect Frank Francisco to accept the arbitration offer, and Texas is continuing negotiations with Vladimir Guerrero.
More on the website later.

I don’t understand what this means. Can someone explain what arbitration is and how it is different than negotiating?
The club makes the offer of arbitration to those free agents it desires to make it to. The player may accept the offer When that happens the player and the team each presnet their case to an arbiter …it’s all or nothing. The player wins he gets what he asks for and vice versa.
If the player refuses arbitration the team MAY get draft picks IF he signs elsewhere.
If the team doesn’t offer arbitration the player continues to be a free agent and may sign with whomever he pleases including his own team.
Tactically there are reasons to offer or not offer.