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The gdal/ogr tree holds source for a vector IO library inspired by OpenGIS Simple Features. In theory it is separate from GDAL, but currently they reside in the same source tree and are somewhat entangled. More information can be found at http://gdal.velocet.ca/projects/opengis. It is my plan to fold OGR into GDAL properly at some point in the future. Then GDAL will be a raster and vector library.
To some extent this is now covered by the GDAL Driver Implementation Tutorial.
The following terms are the same as X windows is released under, and is generally known as the "MIT License". It is intended to give you permission to do whatever you want with the GDAL source, including building propietary commercial software, without further permission from me, or requirement to distribute your source code. A few portions of GDAL under under slightly different terms. For instance the libpng, libjpeg, libtiff, and libgeotiff license terms may vary slightly though I don't think any of them differ in any significant way.
Copyright (c) 2000, Frank Warmerdam Permission is hereby granted, free of charge, to any person obtaining a copy of this software and associated documentation files (the "Software"), to deal in the Software without restriction, including without limitation the rights to use, copy, modify, merge, publish, distribute, sublicense, and/or sell copies of the Software, and to permit persons to whom the Software is furnished to do so, subject to the following conditions: The above copyright notice and this permission notice shall be included in all copies or substantial portions of the Software. THE SOFTWARE IS PROVIDED "AS IS", WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT. IN NO EVENT SHALL THE AUTHORS OR COPYRIGHT HOLDERS BE LIABLE FOR ANY CLAIM, DAMAGES OR OTHER LIABILITY, WHETHER IN AN ACTION OF CONTRACT, TORT OR OTHERWISE, ARISING FROM, OUT OF OR IN CONNECTION WITH THE SOFTWARE OR THE USE OR OTHER DEALINGS IN THE SOFTWARE.
OpenGIS's Well Known Text is a textual format for defining coordinate systems. It is loosely based on the EPSG coordinate systems model. While GDAL itself just passes these definitions around as text strings, there is also an OGRSpatialReference class in gdal/ogr for manipulating them and a linkage to PROJ.4 for transforming between coordinate systems. The OGRSpatialReference, and PROJ.4 linkaged (but not PROJ.4 itself) is linked into the GDAL shared library by default. More documentation on WKT and OGRSpatialReference can be found in the OGR Projections Tutorial.
At this time there is no utility for reprojecting images with GDAL. Hopefully there will be soon, but no timetable is set.