Hey PJ. First off, I am not a lawyer and this does not constitute legal 
advice. I think you'll be seeing that sentence a lot :)
> - Does this also apply to users who use the website without ever going 
> near the source.
> - Do i need to make the source (of the website) opensource to avail of 
> the licence.
There are 2 things here:1 is the terms of service for the website and 
the other is the license for the source code, which outlines the 
conditions for distribution and re-use of the code. I can't really 
advise on what your terms of service should be - have a look at some 
other similar services to get some ideas.
> - Any ideas what is a good licence
For the software side of things a simple solution is the a permissive 
license like the MIT one:
http://en.wikipedia.org/wiki/MIT_License

It basically says that anyone can do whatever they like with the 
software (including selling it) but you're not going to take any 
responsibility for damages etc caused by it.

There is quite a good review of various licenses at wikipedia:
http://en.wikipedia.org/wiki/Open_source_licenses

all the best
Karl


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