The GPL would allow you to distribute a playback slave for free. You may not think that this is worth your while. On the other hand, such a UI-less slave is pointless without something like iPeng. And to the extent that it is pointless, the free (GPL) app then becomes a marketing tool for/introduction to (the chargable) iPeng. I am not sure how much of the code of SoftSqueeze would port to the iPad anyway. If you can tap into stream.mp3, then it's really just the player registration part of the code. But you looked at it and I believe you when you say it isn't easy. I would just find it sad if the GPL stopped you.
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