mud20 is a project of mine which has seen some improvement lately — enough even to warrant a real release within the next year or so (but don’t get your hopes too high on it).
mud20 is an implementation of the System Reference Document, which describes the d20 rules, in C++ and Ruby. It tries to be complete and accurate, however I do know that some thing are simply not possible to do in a computer programme, which are possible in pen-and-paper rpg systems (like seeing into the future or talking to the dead), so I only implement the rules which are feasable.
The project started as a sourceforge project, but I moved to gna recently. The reasons for this move was that gna is based in France, which is not the US. France has saner IT laws. This makes me feel a bit safer too.
Oh, and yeah. mud20 is of course free software (beer and speech). If you want to use it in a project of yours, feel free to do so. The license is GPLv2, but I may change it if I think it will benefit the library.

mud20 is currently not being actively developed. I plan to get back to it at some point in time, but right now I just have too many things to do.
With the upcomming version 4 of the D&D rules, I might decide to drop the current plans and start over with the version 4 rules (if they are significantly different from the old rules).
A bit (read: a lot) overdue: mud20 has been cancelled for now. The d20 rules are no longer free and likely never have been (if anyone can tell me exactly what d20 is, do so — comments here will be fine), and especially regarding D&D 4, the rules are tightly controlled and it’s basically impossible to do anything, legally, without getting permission from (and likely pay a lot of money to) Wizards of the coast.
This makes me think we need a free, (truly) open generic RPG system, which can be implemented in a programming language and used in computer games. Hopefully the same system will be usable outside a computer as well.