In all cases where you wish to use Blitz unmodified (compiled from source or using binaries), there are minimal licensing requirements. You may do as you wish, including:
The only stipulation is that you obey the requirements in Blitz's license file which, amongst other things, requires that you include a copy of the license in your software release (be it a commercial product or source code release for research purposes).
In the case where you release your modifications publicly, in source code form, the licensing restrictions are identical to those for using Blitz unmodified.
If you make modifications to Blitz and wish to keep them proprietary, you become subject in full to the Sleepycat licensing conditions. Under some very limited circumstances, Sleepycat permits usage of Blitz/Db without requiring a commercial license but in the majority of such cases, you will be required to pay for a commercial Db license.
Dan, I think as long as the customer doesn't see BDB at all, but BDB only runs behind your BSD-licensed Blitz application, that your users can use Blitz (and indirectly Berkeley DB) without buying a separate license from Sleepycat. As long as they don't modify Blitz or call the Berkeley DB APIs directly, then this use should be all right under Sleepycat's public license. If they should make proprietary modifications to Blitz, or make direct calls to Berkeley DB APIs, then they'd need to come to us for a commercial license, or make their own source code publicly available.