[garrettr_]

  /dev/random is a PRNG, and predictable. You shouldn't use it for security applications but only for specific state/algorithm randomness.
  /dev/urandom requires hardware noise/key events, etc. to generate its entropy. These become hard to find when your dealing with purely virtualized installations.

This is not true, at least on Linux. /dev/random is actually closer to what you describe as /dev/urandom. It is a cryptographically strong randomness source that blocks depending on the state of its internal "entropy pool". /dev/urandom is also a cryptographically strong randomness source (seeded from /dev/random), but it does not block.

Here's a great blog post with more info: http://www.2uo.de/myths-about-urandom/

[tptacek]

On the BSDs, there's no real distinction between the two, and the names are just there for compat.