Netscape was the first major company to release a significant project as Open Source. My biggest fear, and part of the reason I stuck it out as long as I have, is that people will look at the failures of mozilla.org as emblematic of open source in general. Let me assure you that whatever problems the Mozilla project is having are not because OpenSource doesn't work. Open Source does work, but it is most definitely not a panacea. If there's a cautionary tale here, it is that you can't take a dying project, sprinkle it with the magic pixie dust of 'Open Source', and have everything magically work out.
Software is hard.
The issues aren't that simple. Frankly, Netscape released the code in part because they were desperate. They had lost the browser war. I don't think so. As Jamie says, Open Source does work, but not everywhere.