Open source to open source, corporation to corporation.
Basically, you can do just about anything with MIT- or BSD-licensed software. But the GPL tries to make everything around it GPL too. If you build software that integrates with a GPL'd library, you have to release your software with a GPL (or similar) license.
So Zed's plan is to offer his software under a GPL license for free (open-source to open-source), and also sell it without the GPL license for pay (corp to corp).
Good place to go for GPL info: the GPL FAQ (http://www.gnu.org/licenses/gpl-faq.html)
So if I use mongrel or lamson I'm not distributing that code in binary or source form. Thus, if I want to use the code I can do whatever the hell I want (modify it, use it, print it out and bathe in)... until I distribute it somehow (which a typical web-app never does) it makes zero difference.
I'm VERY confused after reading this rant as to what Zed thinks this actually does.
http://www.dreamsongs.com/IHE/IHE-42.html#pgfId-956546 http://www.dreamsongs.com/IHE/IHE-47.html#pgfId-956575
If you want airtight legal advice, only a lawyer can get you that.
http://www.ifosslr.org/ifosslr (via boing boing)