The rules are here: http://download.microsoft.com/download/ ... 0FINAL.pdf
I am not a lawyer, but I've spent time at Groklaw. As I understand that license then...
You need a valid license for Visual Studio. I understand there are student and maybe hobbyist licenses for that. I don't know if they license the features that will be needed for Windows 7 Compact.
You can create a Windows CE 7 runtime image and use it yourself. You can install and distribute up to two images on hardware provided those are not general purpose computers. You can distribute runtime images to other MS licensees.
All such runtimes must only be used for non-commercial purposes, which means they must not be used in the course of a business (educational uses* excepted), or as part of a commercial product or used to create a commercial product.
As I understand it then, it is possible for hobbyists to use it and distribute it. There may be some hoops to jump through in that everyone who uses it has to be a licensee capable of at least installing a runtime image onto hardware. There may be other licensing costs for the supporting technologies even if all you do is to install a runtime and you never use them.
There will be another license for companies and people that require to make commercial use of it.
* Commercial is defined as bringing profit, but "the payment of tuition to the school or receipt of a salary by the instructor does not constitute financial consideration" ie you can use it as equipment in class but any other use would be under the above rules. For example, if a student project resulted in a device for taking the register, that would be non-commercial, but if the school used it for such, that would be commercial.