It is under the LGPL (less restrictive than the straight GPL). In other words, you do not have to license your project under the LGPL or make it open-source. However, you do need to provide the end user with the sourcecode (for the LGPL-licensed parts only), the LGPL user agreement, and a method for swapping out the LGPL-licensed parts for other versions than the one you ship with your application. The modular nature of Java makes this pretty simple to do - just keep the LGPL-licensed parts in a seperate JAR, and the user can easily swap that JAR with another that they downloaded/compiled themselves. The requirements are the same for applets - you need to provide a way for them to acquire the library's sourcecode, the LGPL user agreement, and some method for swapping the library out with different versions.
Oh, thanks for the info. I ended up just using the regular Java sound API; after renaming things that were changed in FModEx updates I got a strange NullPointerException coming from inside the library somewhere.