1. More often then not I find most of us swapping these words between each other in general usage...Opensource and free software's are considered to be one and the same but there is distinct and certain difference between the two....Software available free of charge is not necessarily free from restriction.In the open source community, "free software's generally means software considered "open source " and without restrictions,in addition to usually being available at no cost.This is in contrast to various "free ware" applications generally found on windows system available solely in a binary executable format,mostly .exe but at no cost.
2. Apart from this another term FOSS is available in this lingo...FOSS is an inclusive term that covers both free software and open source software, which despite describing similar development models, have differing cultures and philosophies.Free software focuses on the fundamental freedoms it gives to users, whereas open source software focuses on the perceived strengths of its peer-to-peer development model.
Source : Digital Forensics with open source tools by Cory Altheide and Harlan Carvey and Image Source : http://fullmetallinux.wordpress.com