0.5-releases of Morphix Base are fully open source under the DFSG. Some Base ISO's do contain the nvidia minimodule, in /minimod, but this is easy to remove. Likewise, Morphix LightGUI 0.5-pre4 is also fully open source.
There are however some packages for which licensing isn't fully clear. The most prominent package is the mplayer mediaplayer (http://www.mplayerhq.hu/homepage/), the project claims that it is GPL, but it isn't in Debian yet for legal reasons. However, it is distributed by other distributions.
As for any Morphix-specific software: all is licensed under the GPL. All screenshots, wallpapers and other graphics in Morphix can be freely used. If you want to modify them, you may, but with both the software and graphics I expect that credit is given where credit is due and for software you must follow the GPL license supplied. Morphix is an unofficial Debian-derivative, but I'd appreciate it if you give them credit for their great distribution, as without it Morphix wouldn't be possible. Also, mention Knoppix, as it was it that started the Morphix project.
Anyway, the choice is yours to take. I am not a lawyer, but I strive to know about everything that goes into morphix. I can however not be 100% sure if everything can be exported to every country. If in doubt, checking with your attorney is always the best thing to do. Morphix is a growing community that started as a private project and if you find new information or violating software just let us know and it will be dealt with. I'm pretty confident about it, but we're human, not a company and can't idemnify users or developers. Yes, we're human.