Part of it depends on how many customers you would have that are willing to spend money. If you have only a few customers, you can provide custom software. If you can work it correctly, what's custom for one client is custom for a majority of the rest, allowing you to have more paying clients. This may work best in niche markets.

I know of a company that is not part of the Free Software movement, but has been following this model for the last 15 years. (They provide source code, technical help, installation, etc...) It wouldn't hurt them to have code to be publically viewable.

Didn't even mention that they are Bay Area based as well. I also have another friend who's an indie consultant. He writes custom Perl applications at home. Travels for doing the installs and the like. He brings down a good fee.

Unfortunately, neither of my examples offers anything free, though the second makes use of what Perl has offered. Hmmm, I'll have to talk to him about that. Get him to contribute back, though he might be and I'm just unaware of it.