I'm sure RedHat has some reason to believe that their restriction against installing licensed copies on additional machines is legal, but I've never been to understand how they reconcile that. There is no distinction between binaries and source here, and no exceptions for how you impose those restrictions. As long as they make the source available so projects like Centos can exist, I doubt if anyone will challenge them on it, though.As I understand things, Red Hat is and has always been an ardent supporter of Free software. While Novell seems not to understand the word "Free" the same way, they too, are bound by the terms of the GPL. Red Hat does ~not~ restrict redistribution of their modified Linux kernel, or anything else covered by the GPL. They do not, however, offer their original artwork or trademarks under the GPL. You may neither modify nor redistribute those two things. They provide documentation for stripping them out, which makes it easier to "re-spin" Red Hat into distributions like CentOS. What Red Hat primarily sells "seats" of, is access to the Red Hat Network, which is the only supported system update methodology. I am neither a lawyer nor a representative of Red Hat Software, just an enthusiast like you all.
Yup, that's correct. Terra Soft (now Fixstars) does exactly the same thing with their license for Yellow Dog Linux. The software is free; the trademarks are not. Even Eric S. Raymond remarked on the cleverness of Red Hat's way of doing this. I talked with some folks at Red Hat at their Raleigh, NC headquarters, and that's how they explained it. It's also how Matt Szulik explained it during his tenure there. I even asked Richard Stallman about that during a lecture in 2007, and he said yup, that's fine by the GPL.
So yes, Red Hat remains a dedicated supporter of Free Software, and there is no legal challenge here to make. The CentOS team itself have remarked on the fact that there are no similar clones of SuSE like there are for RHEL.