Open Source Initiative (OSI) is an organization promoting open source software (homepage). Free Software Foundation (FSF) is a non-profit organization supportig free software movement (homepage).
Although they seem to have similar aims they are addressed to different aspects of software: "open source" is a development methodology (definition of Open Source is here), "free software" is a concept which means the freedom to run, study/discover, change and distribute software (http://www.gnu.org/philosophy/free-sw.html). Access to the source code is a precondition for these freedoms, thus the concept "free software" contains also openness of the source code, but "open source" itself does not say anything about the price or other commercial aspects, "open source software" can be commercial software, but neither free nor open source software can't be proprietary software. Distribution and modification of proprietary software is restricted, you have to get permission for that. "Free software" does not mean "free download" (i.e. price 0), the differences are explained here.
Thus OSI promotes open source deveopement as a practical (business) solution, FSF promotes freedom (as ethical category) of using and developing software.
Software for 0 cost, but with non-published source is not free nor open source software.
Both organizations have set up a licence approvement process- licences approved by FSF complying with free software definition (as this is described above) while licences approved by OSI meet the criteria of openness of source code (for more specific description see http://opensource.org/docs/osd.
The lists of licences approved by OSI and FSF are available at http://www.opensource.org/licenses/alphabetical and http://www.fsf.org/licensing/licenses.
Numerous licences have approvement of both, thus being free and open source software. Here is the table provading the comparison of licences approved by these organizations.
Basically we can conclude that OSI is aiming at companies' needs while FSF is focusing on developers' and practitioners' interests.
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