You often hear the terms 'free software' and open source used interchangeably but they're not the same. In fact, true free software zealots launch into a fiery diatribe on the issue should you even utter the words "open source" when speaking of free software. Free software is not related to the amount of money you pay (or don't pay) for software; it is an ideology. Free means freedom. Most writers relate the concept to free speech or free beer, however, neither fully illustrates the concept.
Free software, as defined by the Free Software Foundation (FSF), comply with the Four Freedoms.
Freedom 0: The freedom to run the program, for any purpose.
Freedom 1: The freedom to study how the program works, and change it to make it do what you wish.
Freedom 2: The freedom to redistribute copies.
Freedom 3: The freedom to improve the program, and release your improvements (and modified versions in general) to the public, so that the whole community benefits.
So, you see, for Freedoms 2 and 3 to be met, the source code must be available. And not only must it be available, it must be available for modification for any purpose, commercial or otherwise. These two freedoms make the term 'open source' redundant and unnecessary.
The other major issue with the term 'open source' is that it does not imply freedom of any kind. Just because you can look at the source means nothing from a freedom perspective. Restrictions might keep you from modifying the code for any purpose, redistribution or charging for your new version. These restrictions are abominable to the FSF and its members.
The two key points to remember are:
Open source and free do not mean the same thing.
Free software has nothing to do with price.