I agree, open source does not necessarily mean free, and I was oversimplifying in talking about what I meant by free. I am interested *both* in free as in beer as well as freely modifyable, redistributable, etc. - something along the lines of a GPL/BSD license.
I don't know what you are talking about when you say "read the website". There is not a whole lot on the website suggesting that the software is written in an open source model. The license can't possibly pass muster as an open source license. Agreed, PDFlib lite seems to be released as open source, and does fit open source guidelines - but that doesn't mean that PDFlib in general is developed with an open source model.