Shareware was initially devised in the early
1980's*, and for much of that decade had a growing, dedicated following who distributed programs through
mail order and
BBSs. It was a strictly defined means of distributing and supporting software, that required an element of trust. Shareware was specifically
not crippleware,
freeware,
demoware or limited in any way, bar the mediocrity of the author. Which wasn't to say that all shareware was bad - some of it easily outshone commercial products.
I remember for several years there was a catalogue called The Shareware Book (distributed by a company called Shareware Marketing) that sold many shareware programs, all with meticulously detailed payment methods, on floppy disks. There were shareware programs covering every possible aspect of PC usage: office software, databases, drawing packages, utilities, clip art and fonts, and of course games.
The games section began to grow in the early 1990's as companies such as Softdisk, Apogee, and Epic Megagames began to slowly but surely work towards challenging the commercial PC games sector (notably the many Commander Keen and Duke Nukem episodes, and eventually culminating in Quake, Id Software's last shareware release).
Shareware is still the preferred means of distribution for a lot of popular utility programs, notably those with elements that require a license of some kind, such as WinZip. However, most publishers have abandoned the term - games are back in the hands of big publishers, who release comparatively stingy demos, and much of the other stuff that would once have been shareware is now freeware (sometimes backed by big investors, such as AOL's patronage of Winamp), open source, or adware (such as Napster).
Most of the garage software developers now use the internet as their means of publicity, and there are some large repositories such as tucows and download.com that serve the same purpose that the Shareware Book once did. There were many notable shareware programs from the 'golden age' of about 1985-1992, more than I can easily list here, but I will make an endeavour to node some of those that I still remember (or indeed use) today.
As an aside, my dad was very keen on shareware, and my family still owns vast quantities of shareware programs on floppy and CD. He once made a rather unsuccessful effort to start a shareware distribution company. I like shareware, as although "Open Source all the way" is more ideologically sound, there's something cool about getting small cash donations from satisfied users.
*The Shareware Book claims that the shareware idea was first used in 1982 by Jim Button's ButtonWare (PC-FILE) and Andrew Fluegelman (PC-TALK).