Working in the Software industry for the last 15 years I saw the nice and ugly sides of programming. For me the biggest challenge in software is to create and keep a team of talented and motivated developer who love their work. In bigger companies it is almost impossible to create a environment for this (with exceptions like maybe Google). I always admired the quality of gaming software, seems here we have a high level of identification with company and product.
Back to the topic Open Source: It is astonishing what high level of quality Open Source Teams achieve without meeting each other and big management overhead, basically without spending money. I guess it is impossible to create such motivation in a private company ?!
If you are not really sure what OPEN SOURCE means, you better check the definition and limitation. A good starting point is the Open Source Initiative (link). Free software does not necessary mean free like in free beer !
You want to browse Open Source hosts with a myriad of projects ? Check out the links at the right side of this blog under OPEN SOURCE COLLABORATION.