Ed and I have put the code for the Sprite Generator up on launchpad.net under a BSD license, and you can either download the source as a tar file or if you've got bazaar you'll be able to checkout the branch and hack away on it to you hearts content.
Checking out the branch is as simple as running:
bzr branch lp:css-sprite-generator
We've got some work to do in terms of adding documentation to provide the steps for installing the code, but hopefully this will be added in the not too distant future.
If you want to try the tool out you can of course use our current hosted version at http://spritegen.website-performance.org