Open Source ...

The basic concept of open source software is that the source code is available to the party consuming the software and he/she is free to modify the source.

There can be lots of variations on the above thing and hence a number of licences are available to cover all situations - software being free or not is a separate issue and is definitely not necessary but most open source softwares are also free. An important concept is that of copyleft. Basically if you give out your source for free and someone else starts making money off it by modifying the source and distributing only the binaries, the basic purpose of open source is defeated. So Richard Stallman came up with this technique (more on him below) and created a licence called the GNU Public Licence. This licence is viral, if you change the source of a GPL software and want to distribute it further it has to be distributed under GPL

Here is another good definition.

The free software movement was popularised by Richard Stallman (known as RSM). He got frustrated by closed source software and restrictions that did not allow him to hack them. He then made it his mission to create a system of only open source components. He wrote the popular emacs editor and the gcc compiler himself and released it open source. Visit this site for more info.

Another person known by the three letter acronym of ESR - Eric S Raymond - is a source of a lot of insight into the open source movement. His major work is Cathedral and the Bazaar. This essay prompted Netscape into releasing their browser as open source. He was also embroiled in the famous Halloween Papers.