Jim Speth, iCommune's author, has posted the letter he received from Apple's legal department on Slashdot. Here's the key paragraph:

It has come to our attention that you are distributing a software program called iCommune that violates the terms of the Apple Computer, Inc. iTunes Device Plug-In SDK Agreement you executed. The iTunes SDK materials are licensed only for the purpose of enabling the Licensee's hardware device identified in the agreement to interoperate with iTunes. The iTunes SDK is not licensed for use in a software program for sharing of music over a network. Your distribution of this program is a violation of the license agreement and of Apple's intellectual property rights.

Speth's license allows him to develop a "component system mp3 player console" plug-in. He explains that he's honouring that agreement:

Now, my description of the device might be a little vague, but it does describe an application for which I use iCommune. I have a Mac G4 Cube set up as the media center of my living room. It's hooked into my stereo and television. I use iTunes and iCommune on the Cube to turn it into the mp3 player console I was envisioning when I started work on it. I use iCommune on my laptop to control that system. Unlike your typical device which is directly connected to the computer running iTunes, these systems talk over the network to each other.

I think I'm in compliance with the agreement, but they don't. Hopefully we'll be able to work something out. Otherwise, I'm thinking of ways to do this without the Device Plug-in API, so the project might survive.

IANAL, but I think the description of iCommune that Speth gave when signing up for the SDK license might have been a little too vague. I'd be flexible enough to accept iCommune's streaming capabilities under the "console" umbrella -- iCommune could be considered a remote control with awesome range, letting you listen to your music library from anywhere in the wired world. I think that the file-sharing capability might fall beyond the accepted definition of "console".