LILO is a bootstrap program. It is short for Linux Loader. It is the piece of code which the PC BIOS loads into memory when the computer starts. LILO knows how to locate the Linux kernel (as well as a few other necessities), where to load them into memory, and how to then start the kernel (which starts Linux).
LILO also allows you to select among various kernel images and boot routines when booting. Because of this, LILO can also be used as a boot manager. Many Linux users also have their computer able to start DOS, Windows, or OS/2, as well as several configurations of Linux. And, like the rest of the Linux system, LILO is available for free, source code and all!
LILO is installed as part of the typical Linux installation procedure. It is included in Red Hat, Caldera, Slackware, and presumably, the other distributions as well.
Linux is a high-performance, reliable, multitasking, operating system kernel written by Linus Torvalds. It is very similar to UNIX. It is available, with source code, for free.
When combined with the vast offerings of available utilities and applications, you get a comprehensive computer system that is capable of many things. Most of these are the result of the Free Software Foundation's GNU project. Everything released under the GNU public license must be accompanied by source code. My experience is that the accompanying documentation is so comprehensive that the normal desire to see the source code is almost eliminated! This is not your father's software company.
The GNU/Linux combination is usually referred to as just "Linux".
I offer only three links but they in turn will guide you on your journey of discovering this revolutionary new operating system. The first one has links to the usual questions like "what is it?" and "where do I get it?" The third one is the local Linux group in San Diego, CA. They have lots of pointers to informative sites.