Stupid questions , stupid answers :
1 - Closed source means that only the author and/or the company/companies and/or assigned people have the source. They usually have signed a non-disclosure agreement.
For instance , i can buy the Red Book standard of Cd-Roms , but i have to sign a non-disclosure agreement that i will not spread that information.
2 - Of course , like your car can be stolen , so can a print out or a source code. Hell , you could fire up any hex editor and print out all the assembly code.
3 - Implications ? Well , first you will either have to have an original source and the original compiler or you have to reverse engineer to the whole thing. This can take quite some time.
It can be distributed on anything , p2p , floppy , hardcopy , 1 million pendrives , you name it.
Of course Windows will not improve by opening the source right away , but people might bring some improvements. This will all take an enormous amount of time. Not only do you need the source code on such a large “program” but also the methods they use , data streams , linking , objects , etc etc.
If Windows would be open source now , i think it will take about 2 to 5 years before some company makes a very improved compilation of it. Don’t think those Microsoft programmer’s are stupid. They have come up with some really good stuff. (Isn’t the use of Dynamic Link Libraries a Microsoft invention by itself). And don’t forget some of these programmers even make programming languages like C# and Visual Basic. Sure , they might be spinoffs of something other , but if you draw that line far enough you will see every invention or innovation is a spin off of something that existed before.
Windows XP : From the people who brought you EDLIN