http://www.gnu.org/philosophy/categories.html

Open Source - means you can use the software and/or make changes and improvements to it. There are many excellent Open Source softwares available because the people who write the code just like what they do. They spend their time creating useful, needed programs and then others get to contribute and make improvements. So, Open Source software keeps getting better and better!

Freeware - means it is really free and usually applies to smaller applications.

Shareware - means it is free but it usually has limitations from the full purchased product. There may be a watermark on files or a tag with the companies name or a limited use period.