As of SDL 2.0, the software is freely available under the terms of the zlib license. Before 2.0, SDL 1.x is freely available under the GNU LGPL license.
Both may be used in both free and commercial applications.
You can read the detailed license text at http://www.libsdl.org/license.php
Yes!
SDL 2.0 and later can be freely embedded either as static library or as linked .dll (or .so or other sorts of dynamic libraries).
For SDL 1.2, the GNU LGPL license requires you to adhere to this additional restriction:
The details are available at: http://www.libsdl.org/license.php
Yes! However, for SDL 1.2 you will either need to publish the source code of your program if you're statically linking, or provide tools and object files required to link against another version of SDL.
The details are available at: http://www.libsdl.org/license.php
No! You may use SDL completely free of charge.
Yes, code from the test directory and from the examples in the documentation is placed in the public domain. Anyone can use it for any purpose.
The wiki content is under the public domain. See CACC3sbHSi8d=6jdqCP7ymeF=u6QqSZHOcUdSAXtKaqzjso3oJw@mail.gmail.com
(docs@lists.libsdl.org, 2014-06-15, unarchived) and http://lists.libsdl.org/private.cgi/docs-libsdl.org/2020-September/000942.html (subscribe to docs@lists.libsdl.org to see).
More visible notice pending.