Within the Linux community, there are two major ideological movements at work. The Free Software movement (which we'll get into in a moment) is working toward the goal of making all software free of intellectual property restrictions. Followers of this movement believe these restrictions hamper technical improvement and work against the good of the community. The Open Source movement is working toward most of the same goals, but takes a more pragmatic approach to them. Followers of this movement prefer to base their arguments on the economic and technical merits of making source code freely available, rather than the moral and ethical principles that drive the Free Software Movement.
At the other end of the spectrum are groups that wish to maintain tighter controls over their software.
The Free Software movement is headed by the Free Software Foundation, a fund-raising organization for the GNU project. Free software is more of an ideology. The oft-used expression is “free as in speech, not free as in beer”. In essence, free software is an attempt to guarantee certain rights for both users and developers. These freedoms include the freedom to run the program for any reason, to study and modify the source code, to redistribute the source, and to share any modifications you make. In order to guarantee these freedoms, the GNU General Public License (GPL) was created. The GPL, in brief, provides that anyone distributing a compiled program which is licensed under the GPL must also provide source code, and is free to make modifications to the program as long as those modifications are also made available in source code form. This guarantees that once a program is “opened” to the community, it cannot be “closed” except by consent of every author of every piece of code (even the modifications) within it. Most Linux programs are licensed under the GPL.
It is important to note that the GPL does not say anything about price. As odd as it may sound, you can charge for free software. The “free” part is in the liberties you have with the source code, not in the price you pay for the software. (However, once someone has sold you, or even given you, a compiled program licensed under the GPL they are obligated to provide its source code as well.)
Another popular license is the BSD license. In contrast to the GPL, the BSD license gives no requirement for the release of a program's source code. Software released under the BSD license allows redistribution in source or binary form provided only a few conditions are met. The author's credentials cannot be used as a sort of advertisement for the program. It also indemnifies the author from liability for damages that may arise from the use of the software. Much of the software included in Slackware Linux is BSD licensed.
At the forefront of the younger Open Source movement, the Open Source Initiative is an organization that solely exists to gain support for open source software, that is, software that has the source code available as well as the ready-to-run program. They do not offer a specific license, but instead they support the various types of open source licenses available.
The idea behind the OSI is to get more companies behind open source by allowing them to write their own open source licenses and have those licenses certified by the Open Source Initiative. Many companies want to release source code, but do not want to use the GPL. Since they cannot radically change the GPL, they are offered the opportunity to provide their own license and have it certified by this organization.
While the Free Software Foundation and the Open Source Initiative work to help each other, they are not the same thing. The Free Software Foundation uses a specific license and provides software under that license. The Open Source Initiative seeks support for all open source licenses, including the one from the Free Software Foundation. The grounds on which each argues for making source code freely available sometimes divides the two movements, but the fact that two ideologically diverse groups are working toward the same goal lends credence to the efforts of each.