Open Web Application Security Project
Promotes secure software development Oriented to the delivery of web oriented services Focused primarily on the “back-end” than web-design issues An open forum for discussion A free resource for any development team
What is it...is it a operating system or a software???
Neither.
It is an organization that promotes secure software development.
As part of that effort they produce guidelines and software to help with this cause - software for testing and securing software. One piece of software is a live CD - the goal of this part of the project is "to make application security tools and documentation easily available.".
They are primarily concerned with secure web development.
From the OWASP landing page:
The Open Web Application Security Project (OWASP) is a 501c3 not-for-profit worldwide charitable organization focused on improving the security of application software
(If you are not familiar with the designation "501c3", it is a U.S. legal term that means that donations to the organization are tax deductible.)
More, from their About page:
The Open Web Application Security Project (OWASP) is an open community dedicated to enabling organizations to conceive, develop, acquire, operate, and maintain applications that can be trusted. All of the OWASP tools, documents, forums, and chapters are free and open to anyone interested in improving application security. We advocate approaching application security as a people, process, and technology problem because the most effective approaches to application security include improvements in all of these areas. We can be found at www.owasp.org.
OWASP is a new kind of organization. Our freedom from commercial pressures allows us to provide unbiased, practical, cost-effective information about application security. OWASP is not affiliated with any technology company, although we support the informed use of commercial security technology. Similar to many open-source software projects, OWASP produces many types of materials in a collaborative, open way. The OWASP Foundation is a not-for-profit entity that ensures the project's long-term success.