License terms that allowed redistribution were only half of the deal. It doesn't mean a lot to allow free distribution of an OS if people don't have the means to actually get the data back and forth. Back in the bad old days of the Internet, when a "high-speed" home connection meant a brand-new 56K modem, downloading an ISO image for Red Hat Linux, Slackware or Debian took quite a while -- a couple of days, if you were lucky enough to enjoy a connection to the Internet that wasn't disconnected mid-download. I shudder to think how long it would take to run a simple "apt-get update; apt-get upgrade" on my Ubuntu system if I had to cope with the 33.6 connection I had when I first discovered Linux. (Not that Ubuntu was a consideration in 1996...)
Linux wasn't exactly a household name either, and you weren't likely to see copies of Red Hat, SUSE or Mandrake (now Mandriva) Linux at Best Buy or CompUSA. Even if you did, a lot of folks were unwilling to plop down $30 or more to get a copy of an OS they'd never tried. (Yes, it was once possible to buy the basic Red Hat Linux Standard boxed set for about $29.95. Times have changed.)
But vendors like LinuxMall.com and CheapBytes allowed experimental geeks to get their hands on Red Hat, Slackware, SUSE and other distros for a couple of bucks, plus postage -- without tying up the phone for three days. (In the interest of full disclosure, I should mention that I actually used to work for LinuxMall.com many years ago.)
Cheap Linux CDs, plus user-initiated events like the Linux Demo Day helped get the word out in lieu of big marketing bucks. A lot of emphasis is put on the quality of Linux and open source software,and rightly so, but that doesn't mean much without a good way to get the software distributed in the first place. It's easy to forget, now that Linux is supported by big guys like Novell, IBM and Oracle, how far it has really come. I know several folks who make a living working with Linux now, that got their first taste of Linux from a free CD at a Linux User Group (LUG) meeting or from LinuxMall.com or CheapBytes.
Distributing open source CDs to users in India probably seems like a small step, but distribution is a major key to adoption. As Dana points out, localization also gives open source a leg up on Microsoft and proprietary software. It should be interesting to see whether the free CD push has a major effect in India.