You'll note several distinct differences:
1) we don't charge anything. There's no gain here.
2) accepting donations is not even close to the same as charging for something
3) we do quite a bit of different services, none of which relate to selling a rom or violating license agreements. If you know of a license we are violating, well be quick to remedy the situation.
4) no one is discussing the legitimacy of selling a ROM - which we certainly do not do and isn't what the ebay seller claims to be doing (note, however, that his custom ROM is integral to his business activity, thereby negating his claim).
5) It's totally legal for you to modify your own personal ROM
6) PPCKitchen does not modify ROMs. The best you could claim is incidental distribution. There's a reason why basekits are seperate downloads and from different authors.
7) If microsoft asked for ROM distribution to stop, you can bet it would. They haven't as yet.
You'll note that our products and services stand on their own, regardless of whether a basekit link is provided by us.