I am posting this more for my own edification because I didn't really get what OpenSim was before. OpenSimulator, as I understand it, is a open source BSD-licensed virtual environment server that enables individuals and institutions to "roll their own" virtual world that can connect to various OpenSim platforms or exist on its own walled garden. In their own words:
OpenSimulator is a 3D Application Server. It can be used to create a virtual environment (or world) which can be accessed through a variety of clients, on multiple protocols. OpenSimulator allows you to develop your environment using the technologies you feel work best – we've designed the software to be easily extendable through loadable modules to build completely custom configurations. OpenSimulator is released under a BSD License, making it both open source, and commercially friendly to embed in products. Out of the box, OpenSimulator can be used to simulate a virtual environment similar to Second Life™ (including client compatibility).
Using the OpenSim freely available software, anyone with access to a server on the internet can run their own Second Life-type virtual world essentially for free.
Or you can connect to some of the non-profit and commercially available OpenSim compliant grids for a fraction of the cost of renting a Second Life sim. I.e. a basic setup on the opensim compliant Reaction Grid will cost you $25 a month for a sim. Or you can connect your opensim server for free to the OSGrid, the largest running opensim grid with 2,500 sims and 27,000 users.
One of the most exciting goals of the opensimulator project is supporting various levels of interoperability among grids. That is, right now your avatar identity is tied to whatever world / grid you reside in. I'm Rik Riel in the Main Grid of Second Life, Rik Gkid on the Teen Second Life Grid, Rikomatic Heritage on the Heritage Key grid, and Rik Panganiban on the Reaction Grid. If there are interoperatibility standards across grids (similar to how the web works), then someday I can transfer my avatar identity across worlds and have all of my relationships, groupings, profile, and even my assets come with me no matter where I am currently operating.
Obviously, the technical prowess and infrastructure required to support this is significantly higher than doing a comparable project in Second Life's main grid. But you get a significantly higher level of control of the assets, users, access, and feature set.
Please correct me, dear readers, if I've missed the boat on any of this!