The license type of a font determines how you may use it.
Personal Use typically refers to any use that is not meant to generate profit, such as:
Scrapbooking
Graphic design for personal websites, blogs, etc..
Flyers or invitations to friends and family
Churches, charities, or non-profit organizations
Making T-shirt for yourself or friends at no charge
Commercial Use is for companies or individuals that may profit from the use of the font, such as the following cases:
Flyer or poster for an event that charges admission
Printing a T-shirt that you will be selling
Text or graphics in a book
Graphic design work (logo, business card, website)
And any other situations where you are getting paid
In the majority of the licenses, the font designer or author still retains Copyright, which means that you are not allowed to sell the font itself or claim it as your own.
Freeware, Non-Commercial
In most cases, you may purchase a commercial license for a small fee or a donation to the creator – Personal Use
Freeware – Free to use for both Personal and Commercial
Freeware, commercial use requires donation – Personal Use
Demo – Personal Use
Public Domain – Free to use for both Personal and Commercial
Unknown License – Personal Use
SIL Open Font License (OFL) – Free to use for both Personal and Commercial
Shareware | Shareware, Non-Commercial
Try before you buy. Similar to Freeware, Non-Commercial, but any continued use of the font means you should buy a license. – Personal Use
Creative Commons (by-sa) Attribution Share Alike – Free to use for both Personal and Commercial
Creative Commons (by-nc-nd) Attribution Non-commercial No Derivatives – Free to use for both Personal and Commercial
GPL – Free to use for both Personal and Commercial
Creative Commons (by) Attribution – Free to use for both Personal and Commercial
Creative Commons (by-nc-sa) Attribution Non-commercial Share Alike – Free to use for both Personal and Commercial
Creative Commons (by-nc) Attribution Non-commercial – Personal Use
Creative Commons (by-nd) Attribution No Derivatives – Free to use for both Personal and Commercial
Apache License 2.0 – Free to use for both Personal and Commercial
Postcardware – Free to use for both Personal and Commercial
Design Science License – Free to use for both Personal and Commercial
GUST Font Licence (GFL) http://www.gust.org.pl/projects-1/e-foundry/licenses/index_html – Free to use for both Personal and Commercial
Ubuntu Font License 1.0 http://font.ubuntu.com/ufl – Free to use for both Personal and Commercial
LGPL http://www.gnu.org/licenses/lgpl.html – Free to use for both Personal and Commercial
Regardless of the license, if you use a font and enjoy it please consider making a small donation (anything helps) to the font author.