Open source is the sharing of source files. What this means is that if you compile the source or interpret the source you should be able to predict what is going to happen. With that said, it is not always true.
Also there are many problems that arise between proprietary systems and open source systems. Knowing the strengths and weaknesses of both are key to being a good developer or at least understanding what you are talking about.
These topics range from security, data retention, what you see is what you get (WYSIWYG). One of the great things that open source provides is that it allows for many different people to look at your code. This helps finding new bugs, optimizing algorithms, developing awareness about your project, and allowing people to understand what your project does.
Some of the pro's of a proprietary system is that it easier to make money or a business model off of it. Additionally you do not have to worry about competition taking code, modifying it, and selling it. You can sell binaries without as a contractor such that if there is a problem with the code they have to either reverse engineer the code or rehire you.
Looking at the grey, there are controversial topics, assumptions, and many other things to consider about what goes on between the two. With open source projects, most of the time people are encouraged to expand upon the project. Usually a group or person oversee's new code that is submitted and incorporated it into the project. However, code does not always do what it appears to do. Additionally it takes a lot of work to look over code, decide of it works and is useful. A great example of this is the IOCCC(http://www.ioccc.org/). With proprietary systems, users and sometimes developers do not know where or what is happening to the data they are submitting. Additionally, you can not change proprietary software. The closest thing you can do is to use API's and try to add onto the project.
Opensource generally lags behind proprietary solutions. This is typically because there is a lot more money in proprietary software. Also opensource projects are often very diverse while proprietary solutions are more narrow.
Some very liberal thoughts on opensource, and why it matters:
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