A mixture of both worlds seems to be the best solution or whatever you may want to call it (haven't we heard that before?) Take a look at the licensing scheme of MySQL (somewhere on TcX). MySQL is free for non-commercial use, and costs $200 per server for commercial use, with rates going down proportional to the number of licenses purchased.

The common opinion seems to be that people prefer OSS over CSS because they can't afford to pay for CSS, and OSS bugs are fixed quicker (not necessarily in the right order.) MySQL is open source, it's free for the Joe who can't afford it, and it's affordable for the Big Shot Bill who can afford it. It solves both problems then: everyone can look at the code, find bugs and report them. TcX is very good at fixing bugs quickly, as far as I can tell from hanging out in their mailing list for a while. It also makes only the people pay for it that really should.

On that note, I think much of the hatred people have towards CSS is based more on the pricing than the actual I Want Stable Software. There is lotsa stable CSS out there, as people have pointed out. Unfortunately, most companies lack the common sense to price their software in a way that users are actually willing to pay for it. Paying around $700 for NT Server, or around $30,000 for a copy of Oracle (don't know if this pricing info is correct, but some confused Oracle sales rep quoted me on around $36K or so per server) is just absolutely ridiculous. But if PhotoShop were priced at, say, $40, I wouldn't temporarily steal it until my company can afford it (...), but pay for it, already because I respect Adobe for the great products they make.

The gain in income a software company can derive from selling semi-OSS at a MySQL-esque licensing agreement due to (a) more people buying the software (b) less people stealing it (c) less programmers needed since community helps fix bugs, should probably even out with or top the cost of selling it for less, not making $200 on every x.x.n+1 upgrade, and losing money to some dishonest jocks. (Of course, I'd only call them jocks if they steal software that is reasonably priced.)