[texhax] Distributing TeX

[Karl Berry]

    1.  Is there any legal issues (licensing) which we need to consider 
    before shipping LaTeX with our distribution?

Well, you have to abide by the licenses.
For a general overview of the situation, please read
http://tug.org/texlive/copying.html.
(Although that is all of TeX Live, not just LaTeX, I suspect you
actually mean to distribute more than the minimal/base LaTeX files. And
many of the issues discussed will apply, regardless.)

Sorry, I can't answer your other questions.

k