FreeBSD is an advanced operating system for x86 compatible, DEC Alpha, IA-64, PC-98 and UltraSPARC architectures. It is derived from BSD UNIX, the version of UNIX developed at the University of California, Berkeley.
FreeBSD is a very stable and mature UNIX-variant. While Linux may still be in its "infacy" (which is not to say it can't be just as secure or stable as FreeBSD), FreeBSD has as its roots a true derivative of AT&T's UNIX, 4.2BSD, which dates back to 1982. In 1990, a gutted version of 4.2BSD was released as source code and worked into an Intel-based BSD known as 386BSD.
386BSD never became a stable OS, as in 1993 two divergent groups split off to form separate variants: NetBSD and FreeBSD. Later, in 1996, another project split off from NetBSD: OpenBSD.
If all these splits make your head spin, you are not alone. It's because of these splits that the Linux kernel developers are so paranoid about "forking"-- as each break divided the BSD community.
NetBSD and OpenBSD are commonly considered more secure than FreeBSD while FreeBSD is much easier to work with. However, this is only partially true: FreeBSD is, indeed, much simpler to set up and maintain, but it can be just as secure as NetBSD or OpenBSD with the proper tuning.
FreeBSD is presently used by many high-profile web-sites such as Yahoo! and CDROM.com. Unfortunately, the internet/intranet services area is really the only area that FreeBSD has got much of a foothold in. FreeBSD does not scale down to the embedded market as easily as Linux, and is not as easily supported on main-frames. So it is not quite as versatile as Linux.
However, FreeBSD does have native Linux binary support, and can be much more efficient and speedy "out of the box" than your standard binary-based Linux distribution. Plus, if you have some sort of broadband internet connection, maintaining and updating your FreeBSD can be easier than nearly every other Linux distribution.