IANAL (though I've cc'ed someone who is :), but the plain English version of the license goes like this...
1. you can opt for the GPL or LGPL if you're linking with projects that use those licenses (because the FSF said that the MPL was incompatible...)
2. most people would opt for the MPL which is the most liberal, or at least clearest in intent, of the licenses...
The MPL, in a nutshell, says that any changes *to the original files distributed* must also be released under the terms of the MPL. This is cleaner, imho, than the LGPL which talks about linking and things like that. The concept of the files that you got from the original source is pretty clear.
So, for the Addon SDK, if you don't make changes to any of the files you downloaded, you can just do whatever you want. If you *do* change some of the Addon SDK files, then you need to follow the terms of the license...
All of that said, the MPL 2.0 is in beta and is a good deal shorter and hopefully easier for people to digest.
I'd be surprised if there wasn't a lawyer at IBM already who had dissected the MPL. Finding that lawyer might be tricky though ;)
Kevin