Most of Ubuntu is free software (meaning not just that you don't have to pay for it, but also that you can distribute it, study its source, and modify it).
However Ubuntu also includes a small amount of non-free software, in separate components: restricted (non-free, supported) and multiverse (non-free, not supported). These are programs that may be distributed over the Internet at no charge, but have restrictions that make them non-free. A prime example is drivers for devices which do not have fully-featured free drivers.
You can tell a package is non-free because it's from the restricted or multiverse repository. In Synaptic, check the “Section” in the ”Common” tab of the package properties. Exactly what restrictions are on the package has to be determined on a case-by-case basis. Most can be used and redistributed by anyone, but modifications are not allowed and the source code may not be available. A few, such as rar, have restrictions even on use. Once the package is installed, you can always find its license in /usr/share/doc/$packagename/copyright. On packages.ubuntu.com, check the “Copyright File” link in the right-hand column.
The distinction between restricted and multiverse is that Ubuntu itself pledges to support the software in restricted, whereas software in multiverse is provided by Ubuntu but with no guarantee of Ubuntu support. I's not really fair to say universe and multiverse software is "unsupported", just that support will be dependent on the third party that produced it, or other third parties, and/or the "Ubuntu community": volunteers that package software for Ubuntu. This is opposed to software in main and restricted where Ubuntu have allocated dedicated people to ensure its support.
The distinction between restricted/multiverse and main/universe is that the software in restricted/multiverse is not fully free by Ubuntu's definition of free software, though it is still free enough for Ubuntu to distribute it in a repository. Usually this means that it contains binary code for which the source is not available, though sometimes it can be other licensing issues.
So, technically, multiverse contains software that:
- Ubuntu can distribute, but is not fully free - probably contains binary code without source.
- Ubuntu itself doesn't guarantee to support.
What are examples of packages in multiverse?
Chiefly, ubuntu-restricted-extras is a metapackage containing a suite of software Ubuntu thinks you really are likely to want, even though it's not open source software.
Installer for Adobe's Flash plug-in
Microsoft Core Fonts for the Web
A selection of video or audio codecs with non-free licenses
Unrar
Other packages in multiverse, but not part of ubuntu-restricted-extras, include a small range of Linux based software included either because Ubuntu thinks you're very likely to want to install it on Ubuntu, or because it is very much open source software in spirit but misses out on qualifying with Ubuntu's definition of free software for some reason, such as by including some binary code without source, or some license terms that make its license incompatible (eg a non-commercial clause, or any other "custom" clauses added to otherwise compatible open source licenses).
Best Answer
The software in Multiverse is "gratis", but not free. These are some examples of cases in which software would be appropriate in Multiverse:
The Software is not legal in every jurisdiction (DVD Decryption, ...)
It's software-patent encumbered (MP3 Codecs, ...)
It doesn't provide the user with all of the four essential Freedoms:
Note that those do not include a requirement that modified version be released with a license that grants the same freedom. This is called copyleft, and it's seperate from pure free software.
There are issues with the licensing (like missing, unclear or invalid copyright notices)
Any of the above is disputed or unclear
As htorque quotes, "The onus is on you to verify your rights to use this software ".
Note also: much of the software in Ubuntu enters the repositories through being in Debian first, so the Debian Social Contract & The Debian Free Software Guidelines are of some relevance.