Many people use these terms interchangeably, and I think it's important to know the difference -- especially if you'd like to speak intelligently about this class of software.
I tend to play in the open source camp in general (which is to say, I see the open source development methodology as a practical and better approach to writing software), as opposed to the free software camp (which would imply that I am working to ensure that users' freedoms with respect to the software they use are preserved). But I certainly understand, respect, and resonate with the value of both approaches.
Why Open Source misses the point of Free Software - GNU Project - Free Software Foundation (FSF)
I tend to play in the open source camp in general (which is to say, I see the open source development methodology as a practical and better approach to writing software), as opposed to the free software camp (which would imply that I am working to ensure that users' freedoms with respect to the software they use are preserved). But I certainly understand, respect, and resonate with the value of both approaches.
Why Open Source misses the point of Free Software - GNU Project - Free Software Foundation (FSF)
Nearly all open source software is free software; the two terms describe almost the same category of software. But they stand for views based on fundamentally different values. Open source is a development methodology; free software is a social movement. For the free software movement, free software is an ethical imperative, because only free software respects the users' freedom. By contrast, the philosophy of open source considers issues in terms of how to make software “better”--in a practical sense only. It says that non-free software is a suboptimal solution. For the free software movement, however, non-free software is a social problem, and moving to free software is the solution.