Why should you use Moodle over any other VLE? The problem here normally lies in the fact that people are often wedded to what they are already using and therefore prefer to remain using the VLE software that the organization has decided to use. Either that, or they just prefer traditional classroom teaching methods.
There are a large number of commercial and free open source VLEs currently in the market, all of which offer a basic feature set with some extra features that normally set them apart from other VLEs. Moodle, however, seems to have the most features straight out of the box and is therefore seen as the benchmark against which other VLEs have to judge themselves.
Moodle's features compare quite favorably against the other heavyweight, commercial VLEs insofar as over the last few years it has been Blackboard and WebCT's job to catch up on the feature list. Blackboard, for instance, has only recently had student peer review and HTML content creation functionally added to its feature set, whereas Moodle has had these features for a number of years.
Moodle has been designed to help educators create online learning materials and has been designed to support a social constructionist framework for education, insofar as its pedagogy follows the theory that groups of students or cohorts construct knowledge from one another in a collaborative way. So Moodle therefore supports communication and collaboration between students, groups of students, and tutors.
The support channels for Moodle are second to none, and are based on the open source philosophy. This means that there are a lot more support channels that can be accessed than with commercial software VLEs. For instance, there is a very large resource available on Moodle.org called Moodle docs. This has been based on a wiki engine and has been built through the hard work of the Moodle community. This is a huge resource and is far larger than any commercial VLE software could ever possibly create as it's been created by thousands of Moodle users. Moodle docs can be found at http://moodle.org/docs.
There are also community forums on Moodle.org, which are accessed by tens of thousands of Moodle experts on a daily basis to get and give expert advice on every aspect of Moodle.
However, if an organization needs more timely support, then there are also a large number of commercial Moodle support companies (Moodle partners) that can offer paid support contracts and service level agreements. And as Moodle.org suggests on its website, this creates an environment of competition, thereby leading to lower prices, more choice, and better service.
Moodle is free, or is it? The open source movement often likes to use the free part of the title in order to immediately convince people that this has to be the way forward. It must be noted here that nothing is free—it might just be cheaper than a comparable commercial product. For instance, the total cost of ownership for Moodle is relatively low but it is not zero, or free in any way. Okay, Moodle is free to download and install and there aren't any application software licenses to purchase. However, in order for an organization to use Moodle, they will need to purchase the ICT infrastructure and either purchase a support contract or employ a Moodle administrator. And in my experience, a medium-to-large organization will nearly always need to have a full-time Moodle administrator or developer in order to manage this system.
However, the total cost of ownership is normally considerably cheaper than comparable, commercial VLEs.
The open source component of Moodle really makes it the best VLE currently on the market, as this means that you effectively own the software and can make changes to it as long as you redistribute these changes back to the community. This is aligned with the academic community insofar as it fits in with academic principles of knowledge sharing and peer review. It also means that there are thousands of talented developers working every day of every week to improve the software. It also means that there have been thousands of modules built to add almost every feature you could ever wish for in Moodle. The commercial products are unlikely to be able to provide such a huge database of add-on extensions to their products.