I contacted Content Paradise to ask about the eula. Here are the answeres.

Q: Can items created be given as freebies or sold as commercial clothing props?

A: Here is the official word. It does not prohibit the sale of garments or models
    created with VF.

Q: Does the license expire after 1 year as seems to state on the Virtual-Fashions website?

A: There is no Time Limit to the License for use of the Program. That is Official...
     This is not Official, but I believe the 1 year is for the Free Upgrades. If you read the Product  License in combination with that statement that seems to be what they are implying. It is their limit  of the Support for the Program.

In answer to Jeff's question above:
Does dynamic cloth made for Jessie work on V3?

I took a dress I created for Jessie and tested it on V3, bu it did not calculate and drape properly.
There was a lot of poke through even after the calculation.