Update 22 May 2007
Due to the confusion about WordPress theme licensing, and the implications of using the Creative Commons license, all themes released by Themey.com from this date forward will be licensed under Linkware unless otherwise specified.
Themey.com Linkware License 22 May 2007.
This is a simple license to detail what you may and may not do with Themey.com themes.You may use the WordPress themes freely in your commercial and personal websites provided that the links contained in footer.php file remain unmodified.
You may re-distribute our themes in an unmodified form, for free or as part of a paid package. Modifications to the theme are allowed (except the footer.php links), however distribution of modified themes or derivative themes is not allowed.
Special arrangements may be made; please contact us with any questions or requests.
There are a couple of common options available when releasing WordPress Themes (or any other creation) to the public.
WordPress Themes from Themey.com are released under a Creative Commons License (update: themes released from 1st March 2007 are covered by Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported) when sponsored and available for download, which means you may modify these themes as long as you keep in the attribution links.
Other licenses that you may choose when releasing your own themes include the GNU GPL (General Public License). This is the license that the WordPress blogging software is released under, and allows a great deal of freedom.