License (excerpt from the PAWS documentation).

Basically my licensing terms are the same for any usage of PAWS/Universe, commercial or not. They boil down to these points:

Anyone can use PAWS and Universe for any purpose they deem fit, without paying me any royalties or other financial considerations. In other words, do what you like--using PAWS/Universe won't cost you a dime. HOWEVER, there are a few (minor) restrictions for commercial usage.

You can't claim you wrote PAWS, Universe, or the documentation for them. For the privilege of using PAWS/Universe all I ask is that you credit me as the creator of PAWS/Universe and its documentation somewhere in your own documentation. A mention in your introduction would be sufficient.

You must include a copy of the unmodified PAWS system with your commercial product. A copy of the PAWS ZIP file you downloaded is acceptable. If you want to modify PAWS or Universe for your game/program/product feel free. Likewise if you want to distribute only the compiled PYC versions of your modified copy of PAWS/Universe go ahead. However you must also include a complete unmodified copy of PAWS so anyone buying your product gets a free copy of PAWS/Universe as well.

You may not sell PAWS/Universe ITSELF, nor charge a fee for media, although you are free to sell any software you develop yourself that runs under PAWS/Universe. In other words, you can't charge for a CD containing PAWS alone, but you can sell a CD containing PAWS and your own program(s). You may also place PAWS on a CD containing a compilation of different programs and charge for that. Again, it must be an unmodified copy of the PAWS system, containing everything that came in the original ZIP file.

Game authors who have no intention of selling their games (placing them in the IF-Fiction archive for example) are encouraged to include a copy of PAWS.py, play, and Universe.py with their game. This makes running games using different version levels of PAWS as painless for the player as possible. Game authors do NOT have to include a copy of the entire PAWS system with their game, that would be silly. 
My intent is not to profit from PAWS/Universe nor even to prevent others from profiting from it. I merely want to receive credit for having created PAWS/Universe and to keep PAWS/Universe itself completely free to anyone who wants to use it--for whatever purpose they want to use it for!

So if you want to develop and sell a commercial product with PAWS be my guest. Use of PAWS for ANY purpose is royalty free and except for the conditions listed above otherwise unrestricted.