What is Freeware vs. Open Source

What is Freeware:

Freeware is software offered free of charge, downloadable off of the Internet. If the software requires the user to view ads while using the program, it is technically not freeware but adware. Freeware is also different from shareware in that shareware requires a payment if the software is to be used past a trial date.

Though freeware does not require financial compensation, it does have a user license or EULA (End User License Agreement). Each license is specific to the freeware it is bundled with, but some restrictions are common to most programs. For example, most freeware forbids the user to alter the program, repackage it, or sell it. It might allow redistribution, however, as long as the program is unchanged and the license agreement intact.

Understandably, freeware does not often come with technical support, and some programs do not have an extensive Help menu. Many freeware operators write programs in their spare time and do not have the resources to offer tech support. That said, other freeware programs not only have an extensive built-in manual, but they also have their own websites with FAQs and USENET newsgroups dedicated to users helping users. Some authors of freeware personally answer email from end users, though this can't be counted upon.

Often, a program is only available as freeware if it is for personal use, while commercial or business use requires a paid license. It is important to read any license that comes with the freeware program. The license will appear during the initial stages of the installation process. As with most software, freeware is offered "as is" and the user assumes all responsibility for its use.

Source: http://www.wisegeek.com/what-is-freeware.htm

What is Open Source:

Most software that you buy or download only comes in the compiled ready-to-run version. Compiled means that the actual program code that the developer created, known as the source code, has run through a special program called a compiler that translates the source code into a form that the computer can understand (see How C Programming Works for details on compilers). It is extremely difficult to modify the compiled version of most applications and nearly impossible to see exactly how the developer created different parts of the program. Most commercial software manufacturers see this as an advantage that keeps other companies from copying their code and using it in a competing product. It also gives them control over the quality and features found in a particular product.

Open source software is at the opposite end of the spectrum. The source code is included with the compiled version and modification or customization is actually encouraged. The software developers who support the open source concept believe that by allowing anyone who's interested to modify the source code, the application will be more useful and error-free over the long term.

Source: http://computer.howstuffworks.com/question435.htm