I find clause 3 of the license bad also, since it says that you can only use changes internally. Taken together, I read the license as saying that you may only release unmodified copies of the code and only as part of a larger project.
I take it as reading you may only release modified copies as part of a private project, but may not publicly release a modified/improved copy and call it your own project without violating the license. Which is, if right, insanely anticompetitive, and a gross violation of the spirit and purpose of releasing open-source software.
