Open source runs on LAMP, really easy to set up and admin. Active development and active support forums.
We are a medium size school board with grades k-12. We rarely have more then 100 concurrent users. It does everything we could need it to, it is so far scaling well as more and more teachers and students start using it. Though on Moodle.org there is very very large schools using moodle exclusively so it does do big well.
We have so far had done nearly zero customization. But I've developed for it in the past and found the codebase easy to work with. The active forums, and goodish documentation make necessary customization easy.
There is no way we would ever have the money to pay for licensing of blackboard, and I am the sole administrator for our moodle website and I spent less then an hour per week with it.
Overall I think it looks "open sourcie" compared to BB/WebCT, it just doesn't look as polished. Though I think bottom line it is as stable and usable as BB.