I think we should create a list of best desktop GIS FOSS case studies. First of all this list will be useful to anyone who considers desktop GIS FOSS for a project as an viable alternative.
Please add to this answer as you find more!
- Working with QGIS in a spatial data infrastructure of Jalisco in Mexico
- Quantum GIS and GRASS in Biogeographical Research in the Iberian Peninsula
- QGIS - an interesting instrument for forestry planning concepts at local and regional level
- QGIS in the governmental FOSSGIS stack of the Canton of Solothurn in Switzerland
- QGIS as major GIS software in the Laboratory on Experimental and Applied Geography
- QGIS and GRASS applied to paleontological survey in Western Portugal
- Advanced WEB based vector editing for Swedish Postal Service
- WEB based trip planner built on OpenGeo stack
- GeoServer WFS-T services maintained by Information Centre of the Ministry of Agriculture and Forestry in Finland
- Netherlands WEB based national infrastructure of canals, dams and dikes map portal
- City of New York WFS/GML map viewer
- State of Massachusetts geoportal (851 data layers, ~1TB of data)
- Collaborative map for Western Australia's land data authority (Landgate), using OpenLayers and a Versioning extension to the Web Feature Service Standard
In this GRASS applications list, several case studies are linked.
OSGeo is offering the gallery: http://gallery.osgeo.org/ which links to several use cases.