It looks like it's distributed under a CC-BY-SA licence. OSM actually changed from CC-BY-SA licence to ODbL because it didn't look like that CC licence is suitable for geo databases like OSM ( read more: http://www.osmfoundation.org/wiki/License/We_Are_Changing_Th... ).

It would have to be relicenced (which I presume would not be a problem since ODbL is spiritually very similar to CC-BY-SA). But as maxerikson mentions it's not clear that it should be in OSM

Zillow would have to grant additional permission, OpenStreetMap only accepts data under rather liberal terms (because then changing the distribution license does not have to be a debacle).

"Fuzzy" boundaries are also sort of controversial (i.e., there are more than 0 people who will always speak against them).