~ Definitions ~
Freeware
Freeware is typically proprietary, distributed without source code, and carries a restrictive license. For example, a license might allow the software to be freely copied, but not sold, or might forbid commercial, government or military use.
History of use of the term
The term freeware was coined by Andrew Fluegelman when he wanted to distribute a communications program named PC-Talk that he had created but for which he did not wish to use traditional methods of distribution because of their cost. Previously, he held a trademark on the term "freeware" but this trademark has since been abandoned. Fluegelman actually distributed PC-Talk via a process now referred to as shareware.
Types
There are many variations on the freeware model. Freeware is an umbrella term which includes:
Loss leader. Commercial vendors often release freeware as a loss leader to attract customers to other services or products available for a fee.
Adware. Adware is distributed as freeware, but it requires the user to view advertisements to use the software. Many cases of spyware have been adware.
Donationware or Beggarware or Nagware. The authors of donationware ask that anyone using their software make a donation to the authors or to some third party such as a charity. Because the donation is optional, donationware may also be freeware or fall into some other category.
Abandonware. Abandonware is commercial software that has not been sold for a long time or whose copyright holder is defunct; it has been "abandoned". The licenses of most such software forbid redistribution or require payment, so distributing it violates the author's copyright (even if the author does not or cannot enforce it). "Legal abandonware" is a misnomer for commercial software that has been re-released by the copyright holder as freeware.
Postcardware. The software is essentially freeware, however the author requests that you send a post card expressing thanks and providing feedback.
Baitware. Very limited or defective freeware software, released to deceptively attract users and drive them to commercial products.
Crippleware, Shareware. Shareware is distributed similarly to freeware except that it requires payment after some trial period or for more features (the "full version"), in the case of crippleware.
Cheap Software
Wow!