You asked why provide full source. I like the idea of a completely open project. The feedback and expertise out there is incredible. And because of the open-ness of the project, I've bumped into a number of interesting projects and people I wouldn't have otherwise. Some other open source projects have expressed interest in using freemware with their code, so LGPL makes more sense.
Nothing is set in stone yet.
We're working out implementation ideas at the moment. I'll take a vote when we get to coding, which will start soon, as there are some smaller pieces we can begin work on almost immediately. Mostly by special licensing and consulting agreements I work out relating to bochs and emulation. This is a method of accelerating emulation by converting user code x86 code sequences to code sequences which will run on the native architecture, on the fly. After a code sequence has been translated, the next time the execution path reaches that point, the translated code is run, rather than interpreting it.