For those following along at home, one more point about the Debian
distribution might be illuminating.  Debian maintains a non-free
section, though it is (for some purposes) not considered a formal part
of the distribution.  Debian recently had a vote that overwhelmingly
re-affirmed support for this part of the Debian project.

Thus the issues about the fonts (maybe) and the export restrictions
(definitely) could be dealt with by putting squeak in the non-free
section.  Lots of export restricted and otherwise encumbered stuff
goes in non-free (which is distributed from servers outside the US).
So those concerns are issues for Debian, as for OSI.  They would
affect whether squeak could go in the main (free) section or not.

The problem with the indemnification clause is that it prevents squeak
from going in even the non-free section, because of the liability
issues it raises.

In addition to not being a lawyer, I am not a Debian developer, so am
only reporting what I believe to be an accurate account of the issues
involving squeak on Debian.  I use Debian and squeak, so I'm
interested.

I agree with the earlier point that the overall legal status of these
kind of licenses is dubious, though in the US the DMCA and the
software manufacturers' attempted changes with the UCITA to
make these enforceable (along with other noxious provisions).  For
details on UCITA see
http://cgi.infoworld.com/cgi-bin/displayStory.pl?/features/990531ucita_home.htm
http://www.eff.org/IP/UCITA_UCC2B//.
http://weblog.infoworld.com/foster/ has written a lot about it.