Open source is a special type of freeware where the source code is released as well as the application itself, both without charge. There are not usually restrictions on the purpose for which the application is used. The commonest licensing arrangement for open source is GPL, the General Public License. This is based on four freedoms:
1. the freedom to use the software for any purpose,
2. the freedom to change the software to suit your needs,
3. the freedom to share the software with your friends and neighbors, and
4. the freedom to share the changes you make.
The problem with GPL is that if you wish to use a component which is licensed under GPL, then what you produce must also provide the same free access. This may sometimes be commercially problematic.
An example of open source is the Drupal content management system (see for example http://www.brighthub.com/office/home/reviews/10563.aspx)