Since the Linux kernel is GPL and not LGPL I suppose that it is illegal to link proprietary code to it. How does the industry circumvents this? I would expect that the GPL license will force any developer to release under GPL driver and/or kernel module.
Maybe I am confused and implementing a new module is not really linking against the kernel code ??? How do companies deal with this? Maybe linking the other way around (from kernel to their binaries)?
On the other hand there is the BSD kernel. Where you are free to link protected IP. Can you get a better design implementing your drivers within a BSD kernel? Is there any design restriction when implementing drivers for GPL kernels?
As you said the BSD license as used by the BSD kernel is much more liberal so it is no issue to link whatever licensed modules there.
For the linux case it is correct that the GPL per se forbids the linkage of non-GPL-compatible code which would not allow to link in proprietary modules, or even LGPL modules.
However, the linux copyright holders grant you to link your "LGPL" module with any proprietary code. An example for this is the nvidia driver:
/------------.-\
| Kernel |
| |
| /--------\ |
| | Module | | /-------------------\
| | (LGPL) <========> proprietary code |
| \--------/ | \-------------------/
\--------------/
This would still be illegal under GPL in general, but is explicitly allowed for the Linux kernel. As a reference, see what Linus Torvalds has to say about the issue here:
http://linuxmafia.com/faq/Kernel/proprietary-kernel-modules.html
P.S. Linking is a symmetrical operation in the terms of GPL.