I am going to create a Magento theme and I was thinking of basing it on the Magento ‘Modern’ theme which ships with the install.
1) Is it okay to create theme from this and resell it? ie. Does the theme license allow for modifications to be resold.
2) What is the best way to create my theme, I have heard about child themes but do not understand how they work? Should I just copy the modern theme files in to a new templates directory and modify them as I please.
A quick look at some of the files show they are distributed under the Academic Free License which like most open source licenses allow you to make derivative works as long as they carry the same license.
Also note the following extract which shows you may legitimately sell your theme.
Copy the contents of both
app/design/frontend/default/modern/andskin/frontend/default/modern/to new directories and it will just work.