I have searched the blue dragon website but cold not find any useful information on what it is. What is blue dragon? What is it used for and why would someone use it?
Blue Dragon is a CFML Engine that runs on the .NET framework, produced and maintained by New Atlanta. New Atlanta previously also created and maintained a Java port of their CFML engine, but released it as Open Source under the name Open Blue Dragon and the GPLv3 open source license, in May of 2008. Open Blue Dragon is no longer maintained by New Atlanta, and instead is maintained by a steering committee.
The BlueDragon family is an alternative CFML engine, that runs on Java, .NET and Google's App Engine.
It comes in many different flavours, including commercial and open source versions. The commercial versions are maintained by New Atlanta. The open source version is a completely separate build, maintained by members of the community. The majority of the development is performed by aw2.0 http://www.aw20.co.uk/ and is released under a GPLv3 license, with an exception that lets you bundle the engine without you having to GPL your CFML code.
The vast majority of CFML applications will run unchanged under BlueDragon and OpenBD. BlueDragon has been on the scene for over 10 years and has spearheaded many new functions and tags that have since been adopted by other CFML engines (CFDUMP, CFIMAP, CFTHREAD, CFINTERFACE for example).
Main Site http://www.openbluedragon.org/
Background http://www.openbluedragon.org/about.cfm
Documentation http://www.openbluedragon.org/manual/
So what does open source mean to you? Well basically, the ability to ship your solutions in one of the worlds richest languages, without incurring any license costs to you or your client.
Open BD has the distinction of being the only flavor of CFML that will run on Google App Engine. However, it is actually a separate version of Open BD, and can lag the Open BD current build in features as a result. For this reason, the Railo folks (Sean Corfield/Mark Drew) have said they will not be supporting Google App Engine (a separate build is necessitated by the restricted environment, where I/O really isn't available, etc) I'm unaware of Adobe's plans, who are likely more tighter lipped than open source projects. As a result, if Google App Engine is in your future, Open BD is your only choice at this juncture.