I use the Software Licensing extension on http://churchthemes.com. It is absolutely ideal for WordPress theme and plugin sellers. Easy Digital Downloads uses it themselves for delivering one-click updates of their extensions, which says a lot. It’s great to use a solution that the maker uses themselves and it very active at developing.

Basically when a customer buys a theme or plugin, they receive a license key. You add some code to your theme or plugin (very good examples provided) to create a place for the customer to paste/activate the key. After doing so, one-click updates will show in their dashboard in the same way that they do for themes and plugins coming from WordPress.org.

This is great for making sure your customers are always running the latest version for bug fixes, security, compatibility and of course new features.

Another great thing about Software Licensing is renewals. For example, you can sell a theme with a one year license. The user receives an email prior to expiration (your theme or plugin can also show a notice) asking them to renew. This is great for collecting payments to cover your ongoing costs relating to theme updates and support.

A++++++++++

There is nothing else out there that I could find that even comes close in terms of features and ease of use.