Nobody in the real world cares about open source projects from my personal experience. I realize I won't get a degree, just wondering if people have ever been hired after spending time on something like this.
Define "real-world." Open-source projects are highly relevant in terms of getting exposure and connections. If you contribute to a project used by a company, that can be a big plus, for example. Or if you contribute to a project, you can then probably get internal referrals from other contributors at the companies they work at.
I think that depends on the type of company -- a number of old-school companies would be scared off by open-source contributors. For example, back when I was at Motorola (way before the split, and before Google bought out the cell phone section), part of the employment contract was that anything creative you think of at work or at home) belongs to the company, so technically you couldn't work on any side projects without them owning it. Not that it was legally enforceable or that they ever tried to enforce it...
Also, even today there are a number of companies (esp. in the midwest) that won't let any open source software inside, unless it comes from a paid vendor (like Red Hat).
I don't claim that in order to work at <set A of companies> you should do open source. I only claim that doing open source will help you get a job at <set B of companies>. Those two sets are not the same.
Ok, so "Real world" -- that definition varies depending on what part of the country (U.S.) you are in (or which country, for that matter). My definition of Real World is the majority of companies that you can work at, in a given region. So for the real world on the West Coast, you are most definitely correct -- you are probably more likely to run into open-source friendly companies. In the Midwest, not quite as much (unless you get into one of the financial trading houses).
Actually, now that I think of it, this may not be a strictly regional thing, except that certain industry types cluster around specific areas. I think it is more if a company sees its software as a competitive advantage, then they are more likely to go out on a limb to try to differentiate themselves. Whereas companies that see software as similar to a phone system, or electricity, they are usually only interested in traditional big-company that-you-can-contractually-blame software. At least that has been my experience around here.
I work in the corporate world. The reason it's frowned upon is because employers rather see complete projects that you did rather than a bit of random code here and there in an open source project.
"the corporate world" is a pretty large place spanning companies that will hire people based solely upon open source contributions as well as companies that will disqualify people based solely upon open source contributions.
It's a pretty meaningless statement to say "in the real world, no one cares about open source" when your definition of "real world" is one fraction of one fraction of the real world (specific companies within the corporate world).