The problematic part seems to be:
"If you want to distribute the unchanged official binaries using the Mozilla Marks, you may do so, without receiving any further permission from Mozilla, as long as you comply with this Trademark Policy and you distribute them without charge."
The added emphasis is mine. This means I can't include it in a collection on CD where I charge $5 to cover my costs because that's not "without charge."
Mozilla even has a "fraud report" page (based on the name in the URL) where you can "report" people that charge money for software.
Calling it a "fraud report", along with what they write in the Introduction part of their trademark policy, is very telling about Mozilla's view on this. The majority of free software is available without cost, but that's not what really matters. It seems that Mozilla has confused the two meanings of the word "free" and doesn't understand that the Free Software Movement has always been about freedom, not price.
Free software doesn't mean noncommercial, although I understand that some people also confuse that term as well.
Requiring unmodified versions to be distributed noncommercially seemed to conflict with what the FSF says in their Free Software Definition. Specifically, that you should be able to redistribute copies, either with or without modifications, either gratis or charging a fee for distribution, to anyone anywhere.
Brett Smith later confirmed that requiring people to rebrand the software before distributing it commercially makes it proprietary.
I hope that Mozilla will learn to separate the two meanings of the word "free" and update their trademark policy accordingly. I would also like to see them address their other freedom-related issues, like the fact that some of their programs suggest installing proprietary software through plugins. A program that is truly freedom-respecting doesn't steer people toward proprietary software, and at least two Mozilla programs do just that.
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