I'm aware of Selenium which is a very good open source automated website testing tool.
Is there any equivalent open source tool to provide functional testing for Win32 GUI Delphi Applications?
After a quick Google I've found this one : EFT
So my question is what is your favourite functional testing tool and why?
I use DUnit for testing the internals of Delphi code. Like other xUnit tools, it is good for testing libraries and routines, but has no web functionality or GUI test support.
You don't say what you mean by "functional testing".
It looks from the question as if you are testing Desktop not web applications. With appropriate program design and reasonable amount of custom code, you could get DUNit to cover most of the code with tests - this will be easier with desktop app than with a web application, since you can use Delphi code to create a form and click buttons upon it.
Just remember that putting all the code in the form's button click event is not a good way to organise code. It does not separate concerns and it is harder to test.
Look at TestComplete from AutomatedQA.
Seems a little pricey, but not compared to other automated testing tools.