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About Software in General
Software is a very broad concept. It contains all the programs you use on the computer, even ones that are unseen by you. They can be text editors, image editors, anti-virus solutions, operating systems, etc. Software can usually be categorized into the following categories.
These are the programs that help run the system. Windows would be in here but so would drivers, servers and so on. They help the average user run the system easily through graphical user interfaces (GUI) or invisibly, like drivers. Advanced users find ways of tinkering with system software so their PC runs more effectively and smoothly but any adjustments made to these programs, any settings altered should be done with care, with a possible backup beforehand.
Applications are programs that the user can use for a specific task, but not to run the system as a whole. A word processor is an excellent example. The user can print, write and edit text with it, but probably can't adjust screen resolution with it. Applications can be categorized according to what you use it for. There are image editing utilities (Photoshop, Xara XS), downloading utilities (Flash Get, Azureus), Messaging utilities (AIM, MSN, GTalk), Notation tools (Guitar Pro, Finale) and so on and so on.
This type of software is a spinoff of applications. While they don't influence the system in any way they deserve special interest because these programs assist specialists to write code, quite possibly the code of system software. We can talk about web editor programs (HTML Kit, First Page, Frontpage) or programming utilities used for C++ or Java programming. Many tools can be a combination, for example Flash 8 is a graphical design tool but it also uses action script, a program language to control visual effects.
Freeware programs are available on the net, can be downloaded by anyone and used freely without any limitations. There could be some restrictions like not redistributing or only using the program for individual use, but otherwise the utility is free. As the internet is moving forward freeware is getting more and more popular, many programs can now do at least as much as their counterpart, or at least getting closer. A classic example is Microsoft Office or OpenOffice.org.
Shareware programs a previews of their full version. You may get only a portion of the features of the program, have a time limit on it, or some other restriction, like being able to print or copy only 2 pages at once. They are valuable because they enable users to preview what they buy properly, not just screenshots that show you no real information. Essential PIM, a personal information manager is a good example, you get the most used features for free, but to use synchronization options for example you need to pay.
Some programs may be free to use but only if you allow them to display ads somewhere. In some programs this is not really a problem as the advertisements are intended to be small, not to obstruct, but in others it can be very annoying. If an adware software catches on and becomes popular it may dispense the ad and enter into freeware territory, like Opera, a web browser did not long ago.