Open source software allows for crowdsourcing difficult software engineering problems. Writing software happens to be a field in which there are a large number of people willing to do some work for free (or for receiving some minimal amount of recognition). The greater community benefits from their contributions. Of course it is impossible to derive revenue from open source software, so we should not expect it to provide all of the same innovation that for profit software is capable of.
I think overall open source software inspires more innovation overall, many of the users of the software have ideas on how to make it work better then it was originally programmed so for them to be able to modify the software to make it work for the particular purpose that they need is a good thing.
Open source software means that while everyone has access to be able to program the software to behave in a certain way, Others could potentially write behaviors to alter the software in negative ways. However, the former outweighs the latter. It's basic teamwork at its finest to be able to fix and build something together. Open software has the potential to be a highly creative and competitive market in which only the best products are released after many, many people have done their best work.
Open source software is great because it often provides a more cost effective option to consumers, or it can act as a beta test for larger software. When programs like Open Office provide applciations that are similar to major market competitors Microsoft Office, they can provide great value to users at no cost.
I think that open source software is a good idea. While a lot of people may not be too fond of the idea, I think that it is a great way for the developer to maintain control on the software as well have the freedom to decide how it is distributed, etc.