Funny I have always heard such controversy over cash bar vs. open bar. It really depends where you are from. I have attended both in the northeast and cash bar is typically more expected and not considered at all bad manners just part of the course. When you hear open bar around here - it means party time.
Also, one item to note if you do have an open bar since you are paying for everyone to drink you now become legally responsible for anyone who drives drunk (at least this is the case in Mass). We were told it is better not to have open bar for this reason. We had a couple of bottles of wine put out for each table instead. Anyone who wanted more had to pay.