I'm wondering if I can use ISE Webpack software to develop commercial applications or if I have to go for the ISE Foundation package. Whats the difference between Webpack and Foundation anyway? I know that Foundation supports a bigger variety of FPGA's but is there anything else?
Yes, you can use the free ISE WebPACK to develop commercial applications, just like with the full ISE Foundation. WebPACK simply doesn't support the big FPGAs.