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I think what jcoalson means is that closed-source software can break at any time, and if the author happened to abandon the program after that, your files are lost (unless you can find an older, working copy of the program).
If you're using a stable version of the software, and it already does everything you want it to do without incident, then it's not all that likely to just "break at any time." And if it does, it won't have the disastrous consequences you're predicting (losing all my files). I can certainly see a scenario where a program I've been using for awhile breaks when I try to compress a new album. Drat. But do you really expect me to believe that means I will lose all my files? Of course not.
The one exception I can envision is when undertaking an OS upgrade. That can certainly break software sometimes, and if the decoder is broken I might be screwed. But if I don't verify the operation of my important software before erasing my old OS, that's my own darn fault.
This is really not about open-source versus closed-source, this is about whether a project is being actively maintained or not. If you encouter a bug in software that is actively maintained, all you do is report it to the maintainers, and wait for the results. Thats the same process with open or closed source.
Of course, if the project maintainers have gone AWOL, the theoretical advantage for open-source software is that you could fix it yourself. In practice, for most of us, that theory just isn't reality.
Would you fix it yourself? I'd say that for most people, the answer is no. We want to download the binaries and have them run, and we have neither the time, the inclination, or in most cases the skill to fix problems ourselves.
That leaves one potential advantage to open source: if the original developers lose interest or ability to continue, then other developers can take over. I think you have to evaluate this likelihood on a case-by-case basis. I've seen plenty of open-source software projects that have lost all momentum, and nobody else has wanted to take on the responsibility either.
Being able to download the source code, then, is no substitute for a thorough examiniation of the product and its developers: to see if the program is of high quality, is well-maintained and well-supported, and will not break when you least expect it.
Having said all that---I definitely agree that at the very least the
file format ought to be standardized and published. Encoders are valuable designs and I can understand the temptation to keep them proprietary, but there is real value and safety in keeping the decoder open. Heck, doing that might even create new markets for the encoder, as people create decoders for new platforms that weren't initially considered.