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Q: What is the difference between proprietary and open source?

A: A short answer is that proprietary software is controlled by the company and/or owner. For example Microsoft XP is a proprietary software owned and controlled by Microsoft, Microsoft does not allow you to see the source code.
Open Source is as the name implies, open. Linux is an example of open source, its software is continually updated by a developer community and you are allowed to see the source code, allowing you to modify it, if you wish, to fit your needs.
A more complete answer can be found here: Open Source vs. Proprietary

Q: Why do I care about the differences of software?

A: As a small business, a business starting out, or even the home user there may be advantages for you by using open source software. There are open source projects for almost any software application you can think of. Examples being:

So why do you care about this? Cost. One main advantage is cost. Not only is there a software application available to fit your need, it is most likely at a lower price, and quite possibly free. And with open source software you can customize it to fit your needs.

Q: So if it is lower cost, or even free, it must not be very good quality right?

A: Many high quality software products are available from open source communities. Dansguardian and Squid are two very popular and effective softwares used to filter the Internet. Some are so similar you can hardly tell the difference, for example Open Office vs. Microsoft Office. Many large corporations use open source software, many times because of cost, performance and stability. Even Microsoft has agreed to work with an open source software company.

Q: Where can I learn more about open source??

A: Here are a couple of sites to give you more information. You can also type in "Open Source" in any search engine and you will find a ton of information.
Open Source Homepage