Run by the blender institute the peach project followed on from the orange project and its goal was to make a movie complete with open source tools. It was a mechanism of both promoting blender and other open source tools but also to drive internal development of the tool.
Project orange finished a few years back and gave us Elephants Dream a short cgi film.
The new film that Project peach produced Big Buck Bunny is a sort of pixar esc animal themed short. They put a lot of work into refining blender's fur rendering capabilities and animation techniques and it has paid off it looks pretty professional grade work not quite up to the level of a pixar or dreamworks film but not far off and doubly impressive since it was a small team and mostly financed by DVD sales.
The premier of it was a week or so ago and I think they release the full thing free online at the weekend but for now the site has the trailer there is also a copy in the internet archive that may or maynot work (I can't see it from work) http://www.archive.org/details/BigBuckBunny1280x720Stereo. The DVD copys have gone out and I got mine today (it's quite nice because by buying the dvd I get my name in the credits as well as all the files and media used to render the film on one disk).