Restricted in the Linux context has to do with licenses. Because Linux is
open source things are grouped around licensing. In some countries due to
differing laws, using a codec may be legal or illegal. This is true
regardless of the operating system. For example, MP3 is a format owned by a
German company. To play MP3s you need a codec which can be purchased. Most
people do not bother. They bought an MP3 player so they erroneously assume
that this allows them to play them on personal computers. It is the same
with video codecs. Flash is free but it is proprietary and in Windows you
must click on a EULA to use it. When you agree to comply with the license
you can use it. Linux is usually shipped free of software that includes
EULAs. So Ubuntu uses the term restricted to underscore this.

By grouping them together Ubuntu is trying to make it easier to install
them. Some distros such as Mint skirt the issue and just install them. Mint
users of Flash for example have not agreed to abide by the EULA. This is
probably not legal, but has not been challenged. That does not make it
right. I notice that Ubuntu is following suit in the Maverick installer,
although they make a statement that by installing that you agree to any
license agreements to cover themselves.

Basically it is up to the end user to police themselves. There is nothing to
say that any developer won't come down on you for violating their patents.
Some countries do not recognise any software patents. This is mainly for the
US which is leading the crusade on software patents chiefly funded by
Microsoft and the motion picture industry. This is aimed mostly at Europe
and Canada which do not recognise software patents and are considered by the
USA as being hotbeds of piracy as a result.

So next time you see a EULA or are faced with having to download or install
a codec, just remember that this is a huge issue for some people and
companies. It should not be dismissed or ignored because it could come back
to bite you. Many people such as me think that the US is out to lunch and
Congress is in the pockets of big business. See:
en....pedia.org/.../Anti-Counterfeiting_Trade_Agreement
http://www.michaelgeist.ca/