I contacted the mysql guys and they said that using MySQL as described in my initial post is free of charge:
Certainly during the development phase
there is no requirement to purchase a
license as you can use the Community
Server for that, however it would make
sense that once you went live you
would purchase MySQL Enterprise to
ensure you had access to the most
stable versions and support.
More information can be found at:
http://www.mysql.com/about/legal/licensing/oem/
Community Server is released under the
GNU General Public License Version 2
(also known as the GPLv2). This can
be found at
http://www.gnu.org/licenses/old-licenses/gpl-2.0.html
Provided your use of MySQL Community
Server complies with the GPLv2 then
you are free to use it. If you are in
any doubt, then it is worth looking at
Enterprise.
I also asked if I had to release/publish my code under a open source license if I used the community server. This is the answer I got:
I am not a lawyer, so please take this
into account. Also you probably
should be talking to the sales staff
on what you can and cannot do, you can
get their details from the contact
pages on www.mysql.com. However as I
understand the GPL unless you are
distributing MySQL with your code you
do not need to release your code under
the GPL. If, however, you do
distribute MySQL then you either need
an OEM/ISV license or your code must
be under the GPL, or one of the other
Open Source licenses covered in the
FOSS exceptions listed in the FAQ page
I gave you.