The Source Code Project was started in 2002, when Volition released the source code to the game known as "FreeSpace 2". This virtually unknown game consistently won awards for being a great action space sim, but never really caught on when it was released. The Source Code Project has worked, and continues to work, on improving the graphics and gameplay of this ten-year-old game. See the screenshots page; I think they pretty much speak for themselves
Some of the larger projects in the FreeSpace community are The Babylon Project, Beyond the Red Line (a Battlestar Galactica mod), and Wing Commander Saga. There's also a number of campaigns both for these mods and the original game's storyline.