While many people may have heard of the term “open source,” not everyone comes across the term “open standards,” though, it's due to this that most of the internet is available to you. To explain, it's probably best to first detail what the different terms mean.
Is where the coding is specifically designed to work within its own system. For example, a word processor document that can only be used on that particular word processor. Nothing else can read the document, because it's written in some special way, and the information about how it is coded is not available to other people to even make a “reader” for it.
Information is made publically available about the structure of something, so that other people can use it (read it, create more of the same, work with the information, etc.). While this doesn't give away the workings of the original software, it does allow you to work with its files, using something else.
The actual working code of the program is made publicly available. Meaning that you can modify it (if you have the skills), to create customised versions of the software, or fix errors in it; and that you can check the code for dangerous activities (caused by errors, or malicious intent). Naturally, open source programs aren't generally commercially viable, as people wouldn't need to buy it from you, they could get it from some public source (for free). Though open source vendors some sell technical support or training services, for using the software, as their way of recouping their costs. And you could argue that some software is deliberately awkward to use, so that you had to be trained at using it.
Proprietary coding is bad, because you're locked into their system. If it's faulty, you're stuck with it. If the company goes bust or drops the product, you're stuck. Computer systems using different proprietarily coded software, in combination, typically have compatibility problems, because it's not known how the others work. You frequently end up having to have several different programs installed, that essentially do the same task, just to be able to work with other people. And it's not too uncommon for businesses producing proprietary software to be totally exploitative, and have no other aim than making money, without any real desire to provide a “service.”
Open standards means that there can be a common way of exchanging information, and working with “systems” (interelated things). Open standards are good, because they allow you to work with things without having to use exactly the same software as the next person (which may not even be available for your computer system, or be prohibitively expensive).
Open source means that everything to do with the product is public knowledge. This is good for the user, as they can know exactly what they're dealing with. But often means that such products are only made available because of someone with altruistic tendencies. Although if someone did develop the world's best free word processor, that everyone used because it was the best and free, that wouldn't be such a bad thing for us (better to have one decent one, than 6000 different ones, and a widespread infestation of really bad ones). It would also force commercially developed ones into having to be better, or they'd just have to forget about trying to sell their product.
Imagine the mess we'd be in, if the telephone systems didn't have some common point in their operating principles. There's a variety of different phone companies, and you'd be in a damn annoying position if you had to have a phone with each company (and pay for them all, too), just to be able to call your friends who happened to all use different phone services. But because there's a commonality between them all, you can have one phone, and call anybody with it, without having to know anything more than what number to dial.
It's an open standard system, where it's known how to communicate between them, even if different companies produce different exchange equipment to do the job, and their systems (internally) work with their own methodologies. They're generally also a type of open source system, where the the phone company's own engineers do have the design information for repairing and customising the equipment made by some other manufacturer, for them. And even though they're open source, other companies can't just blatently copy their designs, and make profits without doing any hard work, because patents (and the like) protect their designs. But that's easier to do with with hardware than software (patenting, and proving that someone copied your design).
E-mail works well because the manner in which e-mail works isn't a secret (other than a few odd-ball systems deliberately designed to be non-standard, to force you into using their system). E-mail is an open standards system. The information about how to create messages, and send them, is publically defined. So that virtually any computer system can use e-mail, providing someone has written software to do it, and virtually any mail program can read mail written on any other mail program (until someone does stupid things when authoring mail, as typical of Microsoft).
(Microsoft likes to re-invent the wheel, with square corners; and re-invent the road, too; so that nobody else can use them. Even though they've already been using it for a long time, and re-inventing them will break everything.)
Likewise, with web pages. The method of constructing and serving them to you, is a publicly defined open standard. And news (usenet), FTP, telnet, and a variety of other key feature of the internet. Because they're open standards, software can be written by anybody to handle the data. Whether that be open source, or propietary programming.
But things like ICQ, MSN messenger, Yahoo messenger, etc., use proprietary coding. This means that unless someone can fathom out what they do, you have to run their particular programs. So you end up running several programs to chat to all of your friends. You can't easily chat or exchange things between friends using the different systems, and you end up filling up your harddrive with three times more stuff than you want, configuring three programs, continually updating three programs, and so on.
And contrary to Microsoft's, Yahoos, AOLs, etc., beliefs, the answer is not to force everyone into using the same system, their non-standard system; but to adhere to common public standards, and produce programs that can communicate with each other. They would have you believe that other systems can't work with them, because the others aren't capable. The truth is that they deliberately make it almost impossible for others to do so, when they'd otherwise be perfectly capable of it.