David Boswell's "The software of space exploration" is an interesting article -- but too reliant on single sources. The below material may be of interest to correct statements made in his "Penguins in Space" section.
Interview with Pat Stakem, leader of the FlightLinux project:
"Our FlightLinux Project concluded on June 30, 2002. We did not have sufficient time to complete the planned flight demonstration."
Any export restrictions would require applying for and getting an ITAR license.
What was actually uploaded to and tested on UoSAT-12 was a different IP stack developed by VyTek LLC. See:
K. Hogie, E. Criscuolo and R. Parise, Using standard Internet Protocols and applications in space, Computer Networks, special issue on Interplanetary Internet, vol. 47 no. 5, pp. 603-650, April 2005.
That team later went on to run Linux on CANDOS, the communications and navigation demonstration onboard shuttle Columbia in its last fateful mission. CANDOS demonstrated mobile Internet communication using Mobile IP. The above paper also describes that work.
The first IP node on a satellite in orbit was on STRV-1b, in 1996. This predates the UoSAT-12 work. A software stack was uploaded, given an IP address, and pinged by researchers working with NASA JPL. See:
R. Blott and N. Wells, The Space Technology Research Vehicles: STRV-1 A, B, C and D, Proceedings of the 10th AIAA/USU Small Satellite Conference, Logan, Utah, 1996.
A significant step for Linux in orbit operationally on a satellite was CHIPSat, which was based around a single Linux-based computer. That was also claimed to be "the first orbiting node on the Internet" -- after UoSAT-12 and STRV-1b, of course.
K. Rubio, J. Janicik, and J. Szielenski, CHIPSat's TCP/IP mission operations architecture - elegantly simple, paper SSC02-IV-4, Proceedings of the 16th Annual AIAA/USU Small Satellite Conference, Logan, Utah, August 2002.
It's difficult for a layman journalist to get close to accuracy without also interviewing experts for an article to provide points of view and sanity-checking... relying solely on web searches can be misleading.