Open source software is, as the software developers say, free, as in free beer and freedom to change yourself. Here is a nice list of software tools for writers. I think many readers will find a treat or two there too. Some easy choices from the list are Open Office Writer, a Microsoft file-compatible word processor (Windows, OS X and Linux). Open Office Calc is an Excel file-compatible spread sheet, though not mentioned, useful for tracking subs).

I've seen much praise for the first item in the list, but haven't tried, yWriter a word processor for writers (Windows only, but I may try it under OS X with VMware Fusion). Another on the list that I know by its good reputation is Scribus (for desktop publishing, Windows, OS X and Linux). NVU (web publishing, Windows, OS X and Linux), seems to be a frozen project, but a bug-fixed version is here at KompoZer.

Also see the earlier post on EtherPad, for collaborating on the web. In the comments you'll see that FFO's artist-in-residence and writer, Richard Ware, found this useful in one of his writing collaborations. This is not open-sourced, but is free to use, presently.