In his essay describing why people should use the term "open source" instead of "free software", ESR says that the term "free software" is ambiguous. Specifically, the term Free Software can be interpreted as "Software you can get for zero price". Unluckily, this is a bug in the English language itself. In Hindi, we have the words "Mukt" or "azad" which accurately describes the spirit of the Free Software.
At first glance, "Open Source" seems to have overcome this problem. However, this term too is open to being misinterpreted. Most people believe that "Open source" means that you have access to the source code. For example, Sun has made the source code Java available for download. Does it make it Open Source ? No, it does not. To be identified as Free or Open source, a software should grant its users the freedom to can read, redistribute, and modify the source code without any discrimination against persons or groups. The type of license that Sun provides is "look but don't touch".
Robert Scoble shows another mis-interpretation of the term "open source". In his blog post he says:
What he describes will make the project transparent, but not open source.
Open source has become a metaphor for things done in public view with public input. Actually, [Microsoft is] a leader here. Check out Channel 9. It's the first step along the road to open source marketing.
Though the term "Free Software" is ambiguous, it is still better than Open Source. At least
I can say "free software", and by free I mean MuktI prefer the term Free Software over Open source