First thing first, noone needs to burn Emutos in ROM. You can just start it from disk and check out if it meets your requirements. Also since it's in constant development with new features, bug fixes and improvements on every release, if you have to buy the EPROMS everytime is going to be less efficient.
The recent release, if I am not mistaken, has support for loadable icons as well.
As far as I've used it performance is better than TOS in some bits and worse in others. I think the coders recently fixed some issue with slowdowns on hard disk access, so we should get better than TOS performance.
A good selling point for EmuTOS in ROM is that it supports byteswapped, pc compatible, partitions. That means that your disk can be read by any PC, so file transfer is much easier.
Game (and demo)) compatibility is similar to what TOS 2.06 had in the beginning. Unfortunately, and from my tests, many of the D-Bug patches don't work with Emutos. Some do. I am not really sure why.
As for the rest, Emutos is released under the GPL which, as far as I can tell, means that it isn't illegal for it to be sold. What would be illegal, would be to make changes to the code, or use parts of it in your own code and not make that code available.
I like using Emutos.
*Disclaimer. I do the Greek translation for EmuTOS, so I am kind of biased and I consider myself part of the project.