From Business Week July 2006
"Crowdsourcing is a subset of what (MIT professor) Eric von Hippel calls "user-centered innovation," in which manufacturers rely on customers not just to define their needs, but to define the products or enhancements to meet them. But unlike the bottom-up, ad-hoc communities that develop open-source software or better windsurfing gear, crowdsourced work is managed and owned by a single company that sells the results.
To paraphrase von Hippel, it relies on would-be customers' willingness to hand over their ideas to the company, either cheaply or for free, in order to see them go into production."
Check out www.crowdspirit.org for more examples