So what does this mean to you, the cutting-edge designer eager to use high-quality typefaces online? Unfortunately, the responsibility around intellectual-property rights still falls on your shoulders.
Of course, you'll first have to decide which font technology you're going to use, since Netscape and Microsoft are offering completely incompatible implementations (anyone else sick of this yet?) - or do some fancy negotiation based on which browser a user has. Then, you'll need to determine whether you're actually allowed to embed your system's fonts in your Web pages.
Netscape and Bitstream, offering yet another branded technology known as DocLoc, assure that encoded "character shapes" cannot be reverse-engineered into a font, thereby solving the intellectual-property rights of the foundries. Still, rumors of clever hacks that have done just that are flying through Usenet newsgroups and Web-design mailing lists.
Microsoft and Adobe, conversely, have tried to shift the responsibility to the creators of the typefaces, stating that all fonts should carry their own permissions. Their Web Embedding Font Tool does provide a report when processing typefaces, listing which ones can and cannot be embedded. Of course, this doesn't apply to Type1 faces or TrueType faces not tagged with this information.
So what's the solution? Unfortunately, we're only in the experimental stage right now. If you want to start playing with embedded fonts, take a good look at the fonts you've purchased for your system. If they come from Bitstream, Adobe, or Microsoft, you can be assured that they are legal to embed. If they come from another foundry, contact them. Find out their policy. Press the issue.
Font licensing is a tricky issue - one that has been debated since type first went digital. It's not about to go away now.