"Well, IANAL, but looking at the summary of the AVC license here [mpegla.com], specifically the portion quoted below, it seems like royalties are only required to be paid by "end product manufacturers". You could certainly argue that source code is not the end product, and thus you could distribute it without limit. And if you want to distribute object code as well, the only limit would be that no single person who builds it should distribute more than 100,000 compiled copies unless they want to pay royalties. I seem to recall that some existing OSS MPEG-4 related projects distribute source code only for that sort of reason. Royalties to be paid by end product manufacturers for an encoder, a decoder or both ("unit") begin at US $0.20 per unit after the first 100,000 units each year. There are no royalties on the first 100,000 units each year. Above 5 million units per year, the royalty is US $0.10 per unit."
Source: http://yro.slashdot.org/article.pl?sid=07/01/27/0755234