Ashley, dont lay the blame to aac encoder, its possible to use mencoder or even just output batch script and then launch mencoder with it.
There is a lot of free (as freedom, not as beer) codecs even for aac and there is a lot of free encoders that can use em and can be run by bach script.
It may not be as easy as ranma says yet there is nothing impossible. And you dont even need to release C2 under free license (but i hope you will someday) as you can just use external binary to encode everything.