Hoping one of the dev team can help here, since xbmc is a free piece of software are there any royalty or license issues with selling a product such as laptop or mini pc with xbmc preinstalled as part of the package? Will it violate anything or is this pefectly legal?
In most places it's perfectly legal. What country are you in?
Just remember to mention that XBMC is GPL software and provide a link to the source code or at least XBMC.org
To absolutely correct it is "open source" as opposed to "free". The license tells you exactly what you can do with it, but provided you follow the license (ie provide the source code, including any changes you make) then you can distribute it as you like.
PS license is here
https://github.com/xbmc/xbmc/blob/master/LICENSE.GPL