Dr. Jeff and I have had similar conversations about how we wanted to handle our licensing as well.  Since we're not building puppets for sale (or at least not to the general public) and more focused on content, we decided to go with a Creative Commons license, specifically the Share-Alike, Non-Commercial, Attribution 3.0 license.

With the CC license, people are allowed to use our original patterns, ideas, images and video so long as they follow the conditions of the license. If they use our material, it has to be CC licensed, they cannot sell any of our materials (they couldn't sell a puppet pattern based on our design,  but they can make one for themselves; they could use our videos to illustrate a speech about puppetry, or in a classroom, but they couldn't make a dvd of our works and sell it), and anytime our works are used,  they need to attribute us.

We decided CC was best for us because of a lot of the problems discussed above. The Internet has trained people that if it's on the net, it should be free. Patterns, music, how-to's whatever, you Google it up and it's yours. Instead of fighting it, we'd rather give general permission for use, and save the hassle for the infringements that will effect us most.

We also use a lot of CC and public domain works ourselves, so it's our way of giving back.

It's not for everyone, but it's working for us!