OpenJDK is the short form of Open Java Development Kit similar to Oracle's Java Development Kit used to develop Java Applications. Main difference between Oracle JDK and OpenJDK is that OpenJDK is free for all while Oracle Java Development Kit or Oracle JDK requires commercial license.
OpenJDK is the open source implementation of the Java Platform Standard Edition and is free to use with General Public License Version 2 ; GPLv2. OpenJDK 7 is the reference implementation of the Java SE 7 Specification. For more details you can refer the official Java SE 7 specification from Java Community Process here.
OpenJDK 7 was released on 28th July 2011,Since decision to Open Source JDK came late in the life cycle of the development of JDK 6, JDK 7 was first released as open source. Since Java SE 6 was needed as well, to maintain backword compatibility OpenJDK 6 was released by removing the OpenJDK 7 features inappropriate for a Java SE 6 specification.
Community OpenJDK source code can be downloaded from Mercurial repository
Oracle Java is not free anymore!. We need to buy subscription for its usage. Typically for Java SE Desktop Subscription you might have to pay minimum 2.5$ per named user profile per month. And minimum of 25$ per processor (volume 1-99).
For detailed price list please visit oracle here
On the other hand, OpenJDK is free for all and you don't have to pay single penny!. If you don't want you buy Oracle Subscription and still want to use Java for free in all your Production Systems then OpenJDK is the right choice for you.