I think this would clear things up:
The "Free" in Free Software referred to by Richard Stallman is "Freedom" and not "Free" as in the cost of the software. People used to associate the word "Free" with "Creap", "Low quality" thats the reason they coined the word "Open Source".
Now, what "Free software" we typically see in the windows world is "free" as in cost and not as in "freedom". You _dont_ have the freedom to see its source let alone modify it. There are plenty of Open Source Apps in the windows world too.
BUT Open Source software gives you the "freedom" to modify them but they can also be sold at a price > $0 which means you need to *pay* for the software _and_ you'll get the source along with it. An excellent example would be RHEL. You need to pay for it and you get it's source along with it. The beauty of OSS is that someone can buy RHEL, modify its source, and sell or give it away for free. This is currently whats happening with Cent OS.
This is my understanding of the OSS and "Free Software" philosophy of Richard Stallman / FSF. Please correct me if I'm wrong.
Regards,
Dinesh A. Joshi