While Android is open source, core apps like the Android Market are closed source. As Google said to Laptop Magazine, “Augen included proprietary Google software in their product via an unauthorized vendor. Google only licenses its software to partners and OHA (Open Handset Alliance) members directly.”
People looked askance at the GentTouch78's inclusion of the Android Market app because, to date, Google has only allowed smartphones to include the its app marketplace. The Dell Streak is technically a phone, as is the Samsung Galaxy Tab. The GenTouch78 is not.
Technically, therefore, Augen has pirated at least some of the version of Android running on the GenTouch78. Of course, the Android Market on the Augen doesn't work. Clicking on an app doesn't download it. If it can't get a legal version of the Market on the GenTouch78, Augen just lost a big selling point for the tablet.
There are other ways to get apps onto a device, including sideloading or going to an alternative app store. None of those methods, however, are as easy to use, or as complete, as the Android Market.