Hi, a student group I am in is looking to do a fund raiser and we were considering creating a small product to sell around campus, the product would use ATmega168s for control and we would program them through Arduino. We were wondering if selling them would be against Arduinos license. Any help would be much appreciated or if you know where I can find the license documentation that would also be very helpful. Thanks!
Yes, you can sell Arduino-made products. However you have a number of obligations which you are required to fulfill if you do so. Most Arduino stuff is licensed under the LGPL, I would heartily recommend you familiarize yourself with the terms before committing any effort to distribution. Compliance is not hard, per se, but you need to know what you're getting yourself into before doing it.
I think Fjornir overstates the "obligations" you're expected to fulfill, though I suspect some people will be happier if your "gadget" is made "open source."
There is a recent (even ongoing) discussion of the license issues here: http://www.arduino.cc/cgi-bin/yabb2/YaBB.pl?num=1232672092