As I understand it from reading the article and the comments, Cisco will subsidize the patent licenses if you use the binary. If you prefer, you can use the source code, but then you will have to deal with the patent licensing yourself.
"Nathan – We will select licensing terms that allow for this code to be used in commercial products as well as open source projects. In order for Cisco to be responsible for the MPEG LA licensing royalties for the module, Cisco must provide the packaging and distribution of this code in a binary module format (think of it like a plug-in, but not using the same APIs as existing plugins), in addition to several other constraints. This gives the community the best of all worlds – a team can choose to use the source code, in which case the team is responsible for paying all applicable license fees, or the team can use the binary module distributed by Cisco, in which case Cisco will cover the MPEG LA licensing fees. Hope that answers the first part of your question – Nadee, Cisco PR "