i'm really fascinated with the recent <a href="http://www.gnome.org/bounties/">gnome</a> and <a href="http://www.markshuttleworth.com/bounty.html">mozilla</a> bounties.
i think the idea of offering bounties for development of open source code has a lot of potential. if they opened things up so other users could contribute to the bounties, it might work even better. by myself i probably don't have enough money to really make it worth anyone hacking in a feature that i really want, but if there are others like me, each willing to contribute to a bounty, we could probably come up with a decent amount of cash.
one very apt criticism of open source software is that the programmers tend to work on things that programmers care about or are fun to work on. end users' needs are often secondary. a nice bounty system could really improve this situation, letting actual users of the software vote with cash on what features are actually important to them. plus it helps programmers who want to work on open source code generate some income without having to sell out or get a day job.
the whole free-market approach might also help to shake off the open source community's 'commie' image in the eyes of the hardcore capitalists who insist that proprietary software must be inherently better because it has monetary incentive. but it does it without actually giving up any of the advantages of open source.
of course there are all kinds of practical problems to be overcome to make it actually work, but i'm confident that it's possible.
even without an infrastructure in place i still think that large companies and governments should look into directly funding open source projects. the US government must spend millions each year on windows licenses. if they came up with a list of issues that are actually preventing them from switching to linux and presented it to the open source community saying "we're about to give microsoft $X million dollars. if you can fix these issues, we'll instead give you that $X/2 million dollars." they would save a lot of money, and the whole world would benefit from the improved software. since microsoft operates on <a href="http://www.computerweekly.com/Article117557.htm">85% profit margins</a>, it shouldn't be hard for the government and maybe a few big corporations to come up with enough to fund the actual development of what they need.
honestly, i think that these kinds of models, if implemented well, have a greater long-term viability than the current commercial software industry. open source projects don't need the overhead of an advertising department or overpaid executives.