The developers behind Canabalt confirmed that the game's source code will be made available as part of an open source project. The game will be licensed under the MIT Open Source license, which will let other developers use the engine source code in its entirety for both personal and commercial projects. While the code powering the game is available for the world to use, the game art, sounds, animations and Canabalt game-specific code is still proprietary. Basically, you cannot re-package their game and claim it as your own, but you can use the underlying engine code to power your own game.
The developers warn prospective parties that the code behind the game may not be "ideal or optimal." The game was self-admittedly ported to the iPhone in a rush and was done so before the iPhone 4 and iPad were even released. Only two developers have worked on the game and they have managed to keep the game updated as best they can. As part of this effort, the app was optimized for 60 FPS performance on the iPhone 4 and the iPad, and this new code will be included in the open source release. The duo behind Canabalt hopes the code base will be helpful for developers who have some experience with the Flixel game development library, Flash or Objective C.
As an aside, Canabalt is part of the Indie iPhone Holiday Sale, and the devs confirmed the charitable program has raised over US$25,000 for Child's Play, an organization that provides hospitals with toys and games for their younger patients. The holiday sale lasts until January 2, so you have a few more days to buy a game and give to a good cause.