I think that if copyright were abolished, the sale of software would still continue, albeit in a more limited way, paticularly in the business world, even if everything were open-sourced.

Think of this: if you are an IT manager, are you going to trust the OS of all your production machines to some random Joe Schmo's distribution of "Free OS" downloaded from freebies.com? No way, you are still going to get it from a reputable source, and if you have to pay for it, all the better. The sale is in fact a sort of support contract in itself, because the exchange of funds for software thus gives you the right to go after the seller, if not legally, at least create bad press, if there is a failure.

A similar thing would happen with entertainment media. Even though I can get just about any movie in digital form off of Pirate Bay practically the day it is released, I will still pay money to see it in the theater. Why? Because of the experience, and because I know the picture and sound quality are going to meet certain standards (e.g. THX). Just like I will still go to a concert even if I have downloaded the album.

The physical design of many hardware devices, such as automobiles, is pretty much open-source, hence the existence of Chilton's service manuals and the like. But would I theoretically trust my life to a car built from open specs by Larry down the street? Again, no way.

Yes, among hackers (of all stripes), no one would pay for anything anymore. But if I want to take the girlfriend to a movie, or acquire software for work that works as expected the first time, or trust my life to a car, I will gladly pay a fair price for the assurance that it will "just work."

The good news is that overtly crappy software (e.g. Windows ME & Vist) would never see the light of day. But good quality products will still be profitable, and will command a price.