The repackaged application has the same modules as the original, but includes an advertisement module. In some cases, there were no technical changes from the original application at all — just a change in the app name, of course.
Most of the repackaged apps we've seen are "clean" in that they don't have any malicious code included in them. So far, we also haven't seen any instances of the repackaged apps being distributed as paid apps.
Presumably, the point of the repackaging is to include the advertisement module, with the developers gaining some kind of monetary reward when users view or click through the ads being displayed.
However, since the repackaging was most likely done without the consent of the original developer(s), the repackaged app would probably be considered pirated, or at least intellectual property theft to the original developer.
This is still something of a grey area though, especially as Google doesn't actively vet every application posted on the Android Market. Whether most developers — and users — are going to consider these repackaged apps as just another side-effect of an "open market" philosophy, or conversely as rip-offs of a developer's honest efforts, is anybody's guess.
Threat Insight post by — Raulf