Difference Between WordPress.com and WordPress.org

Something that has confused many people is the distinction between WordPress.org and WordPress.com. Let’s clear it up.

WordPress.org is free blogging software. With WordPress.org, you can install themes and plugins, run advertisements, edit the database and even modify the PHP source code.
WordPress.org is the home of this software. Anyone can download the software for free but it must be installed on a web server before it will work. Web servers are generally not free. Hosting your own WordPress software can be fun and rewarding; it also places full responsibility on the blogger. If you mismanage your web server, you can lose your entire blog.

For no charge, WordPress.org provides :
Free themes and plugins.

WordPress.com is different. You do not have to download software, pay for hosting or manage a web server. When you sign up for a WordPress.com blog, you will get a URL like andy.wordpress.com. You do not control the software or the database; FTP and shell access are not included. WordPress.com is based on multi-site version of the software which does not permit uploading PHP themes or plugins. Javascript and CSS are also restricted for security reasons. What you can do on WordPress.com is blog for free.

For no charge, WordPress.com provides web hosting, unlimited database storage with redundancy and backups, automatic software upgrades, community support forums, multi-lingual administration and themes, basic traffic stats, comment tracking, blog and post rankings and other features not available anywhere else. These features will always be free for blogs started on WordPress.com; if you ever find yourself being charged for these at WordPress.com, pinch yourself and wake up!

WordPress.com is a commercial enterprise owned by Automattic, a company started by the founding developer of WordPress and staffed by full-time developers, designers and support agents. Developments sponsored by Automattic are regularly contributed back into WordPress.org so the community can benefit.

WordPress.com offers paid upgrades as a way to provide premium features without forcing bloggers to host their blogs elsewhere. These upgrades are optional. Basic blogs will always be free on WordPress.com and the basic services will continue to be upgraded with better features.