Forge is FOSS. You can do whatever the hell you like with it within the terms of the license agreement. Read it here: https://github.com/MinecraftForge/MinecraftForge/blob/master/forge/licence.txt
The reason for that error has been reported before to be an outdated copy of the mod that allows tou to use all 4096 block IDs supported by Anvil. Did you install some mod that contained '4096' in the name?
1) You paid for a pre-modded MC1.2.5?!?
2) To run a server, you need to remove ModLoaderMp, as it is incompatible with Forge Server. Make sure you are using the appropriate files in the right jars.
Perhaps there's an underlying mod conflict, your best chance is to look for known conflicts, if no luck, try pulling mods out. YOu do have a _lot_ of mods on...
Nah, just looked into more detail at the error message. Not 100% sure what's going on now... I assumed the net.java.game was the issue :-/ Not sure what's going an there as there is no stack trace printed...
Anything in the minecraft window?
No. For further support, go to: http://mcportcentral.co.za/ as that is the support forum for the mod system you are using. Hope I helped point you in right direction.