User's Guide Book: Overview --> Free (Libre) and Open Source Software (FLOSS)

First of all, I think we should use EU terminology, also - the main definitions of lead organisations (FSF, OSI, etc.).

FLOSS
Free/Libre/Open Source Software, the term most commonly used when talking about either Free (Libre) Software or Open Source Software.
OSS
Open Source Software is plain software, just like you know already. When in operation, you won't notice that the software is actually Open Source. The difference with its counterpart (proprietary software, also known as closed source software or CSS) is the way in which it is licensed.
Source code
The human-understandable texts that programmers type to write applications.

What is Open Source Software? - http://europa.eu.int/idabc/en/document/1745/468

The Many Aspects of Open Source - http://europa.eu.int/idabc/en/document/1744/468

History:
http://eu.conecta.it/paper/brief_history_open_source.html
http://static.userland.com/userLandDiscussArchive/msg019844.html
http://www.opensource.org/docs/history.php

More info on terminology: Glossary.