Open source is software that is licensed under an agreement, usually the GNU Public License (GPL), requiring that 1) fully compilable program code be made available for download 2) the program and code be freely distributable 3) extension and redistribution of the code and program be permitted. The “advantages” of OS software include: fast development time, stability due to bugspotting, and freedom to develop software in different conceptual directions.
OS software is, per the agreement, always free, but some people make fine distinctions between Open Source and Free Software. Open source software is ideologically ‘free’, since the code is at ‘liberty’ to evolve and improve itself, but many Open Source advocates also claim that it is a good way to make money! In practice, many OS projects rely on either donations or patronage of a pay service related to the software (e.g., webhosting for open source server software). OS projects also benefit from the donation of a great many hobbyist man-hours. Many successful projects have no profit-motive, but are developed for the sake of having a free tool, oftentimes as a substitute for an expensive commercial product (eg., GIMP as a feature-equivalent replacement for Adobe Photoshop).
The main motive for most open source development seems to be related to the ancient (and in modern times, likely underserved) human desire to work for the sake of a community. The biggest community tent in OS (and perhaps on the Internet) is Linux, the GPL’ed operating system core and related projects (Xorg, Gnome, KDE, Apache, etc.). Participants in the Linux development efforts can tell themselves a (mostly true) story about an open, free, community-driven operating system’s battle (to the death!) with monopolistic, kludgy, closed Microsoft’s Windows empire. The motive, in this case, for contributing to OS efforts is akin to patriotism.
There is an additional altruistic or humanistic motive that I find compelling. The argument is that if the undeveloped world is going to derive any benefits from computer technology, that technology must be affordable. Otherwise, third world countries must make the choice between outlays for computers and software packages, and payments for social services and education, which is unconscionable. Donated old hardware loaded with free software can be nearly as cheap as the cost to ship. A particular advantage of Linux is that it performs well on old hardware. Together with powerful commercial-equivalent applications, these machines could lead to greater and fairer global development.
Open source is a fearsome thing in the developed world, because it threatens to undercut the livelihoods of computer programmers by seeking to create a world where people expect software to be free. OS advocates tend to argue that no such fear is warranted because 1) innovation breeds innovation, and therefore 2) fear of free software belongs to a zero-sum mentality. I won’t pursue this here, but I believe that the OS people are in denial, or lie, about the ultimate implications of a system that relies heavily on volunteerism and donations. This is not to say that open source is not the future.