The SmallWall code is under the BSD license, which basically means that you can do whatever you want with it (including modifying and selling it) for free, as long as the original copyright notice and license appear somewhere in the documentation and/or the software itself. There are no warranties of any kind though.
The SmallWall name and logo, however, are copyrighted and tradmarked. They have strict limitations on use.
For the full copyright notice/license text, see http://www.smallwall.org/license.html.
Although you don't have to pay anything for SmallWall even if you sell it, if you do find yourself making money by selling SmallWall-based products, contributing back to the project (Sponsorship, or assistance) would be very much appreciated.
If you see someone selling SmallWall, and the logo does not link back to the SmallWall website, that is in violation of our trademark, and we would love to know about it.