hiya peeps!
What if I want to modifiy KT a bit? Is it legal? Where is the licence? Is it licenced anyway?

KotOR Tool is Fred Tetra's "child" so anything that has to do with the tool should be run through him first and foremost...

Only he can give you the do's & do not's regarding KT :)

Fred's Site:
http://kotortool.starwarsknights.com)

Fred's Profile (for contact info):
http://www.lucasforums.com/member.php?u=105230)

To more directly answer the question as well Fred has not released KT's source under any licence. I'm not even certain if he will. However all of Tk102's & Cchagrin's tools are released under GPL. Even with the GPL release it would still be good form to contact these modders for permission since they are still active in the community.