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Terms and conditions
The terms and conditions of the GPL are available to anybody receiving a copy of the work that has a GPL applied to it ("the licensee"). Any licensee who adheres to the terms and conditions is given permission to modify the work, as well as to copy and redistribute the work or any derivative version. The licensee is allowed to charge a fee for this service, or do this free of charge. This latter point distinguishes the GPL from software licenses that prohibit commercial redistribution. The FSF argues that free software should not place restrictions on commercial use, and the GPL explicitly states that GPL works may be sold at any price. The GPL additionally states that a distributor may not impose "further restrictions on the rights granted by the GPL". This forbids activities such as distributing of the software under a non-disclosure agreement or contract. Distributors under the GPL also grant a license for any of their patents practiced by the software, to practice those patents in GPL software.
Section three of the license requires that programs distributed as pre-compiled binaries are accompanied by a copy of the source code, a written offer to distribute the source code via the same mechanism as the pre-compiled binary or the written offer to obtain the source code that you got when you received the pre-compiled binary under the GPL.
The distribution rights granted by the GPL for modified versions of the work are not unconditional. When someone distributes a GPL'd work plus their own modifications, the requirements for distributing the whole work cannot be any greater than the requirements that are in the GPL.
This requirement is known as copyleft. It earns its legal power from the use of copyright on software programs. Because a GPL work is copyrighted, a licensee has no right to redistribute it, not even in modified form (barring fair use), except under the terms of the license. One is only required to adhere to the terms of the GPL if one wishes to exercise rights normally restricted by copyright law, such as redistribution. Conversely, if one distributes copies of the work without abiding by the terms of the GPL (for instance, by keeping the source code secret), he or she can be sued by the original author under copyright law.
Copyleft thus uses copyright law to accomplish the opposite of its usual purpose: instead of imposing restrictions, it grants rights to other people, in a way that ensures the rights cannot subsequently be taken away. It also ensures that unlimited redistribution rights are not granted, should any legal flaw be found in the copyleft statement.
Many distributors of GPL'ed programs bundle the source code with the executables. An alternative method of satisfying the copyleft is to provide a written offer to provide the source code on a physical medium (such as a CD) upon request. In practice, many GPL'ed programs are distributed over the Internet, and the source code is made available over FTP or HTTP. For Internet distribution, this complies with the license.
Copyleft applies only when a person seeks to redistribute the program. One is allowed to make private modified versions, without any obligation to divulge the modifications as long as the modified software is not distributed to anyone else. Note that the copyleft applies only to the software and not to its output (unless that output is itself a derivative work of the program). For example, a public web portal running a modified derivative of a GPL'ed content management system is not required to distribute its changes to the underlying software because its output is not a derivative. A counter example is the GPL'ed GNU Bison: the parsers it outputs do contain parts of itself and are therefore derivatives which would fall under the GPL, if it were not for a special exception granted by GNU Bison.
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