Don't get me wrong, I'm all for the open source movement - but its advocates often don't see the real underbellies. Very small amounts of it are successful, and are drastically outweighed by the paid models. Businesses don't use Open Office. Open office is absolute garbage, and its only a tiny fringe that makes that adoption.
Way better in that example is a re-thought revenue model like Google Apps. That has a nice mixture of open-source ethos with a solid subscription revenue model behind it. You get a free product which is ad supported and a paid one that is very reasonably priced. Even then though, most of the business world (yes us included) end up using MS office. Try working with a lawyer and only using open office... you're going to have a bad time.
I also hate to burst your bubble but the donations thing doesn't even come in the remotest neighbourhood of being enough money. We tried this hard for a long time, but donations generate like 2% of the necessary operating capitol to keep the business afloat. Open source companies don't work off of donations either. A couple of hacker projects make money that way until the guy who built it gave up. True open source relies on the 'product halo' to make cash.
Read this article - http://www.extropia.com/tutorials/misc/opensourcebiz.html
VLC is a case where people have volunteered to get together and build something for free. That is totally and absolutely awesome, and hell yes I use VLC. I doubt it will be around forever though... almost anything with no business behind it simply fades away into oblivion.
Open source already rules the web - and I totally agree that an open way to go about things will dominate. However in order to last, it will have to establish business models. If you ask me, that is going to be the 'freemium' model.
You get free stuff that is ad supported, and pay a very reasonable subscription to get the premium features. You can pirate it, but there's no point when its totally reasonably priced, ie. Steam.
No-poles, free souls.