I've developed a Visual Studio web part for SP 2010 and about to deliver it the WSP file to the customer.  I understand that the SP administrator has to install it using PowerShell (is there any other way)?

How do I go about releasing the wsp file and protecting my code?  Will the SP Administrator ask to see the source code? 

Also the web.config file has to be edited.  What are the security and server disruption issues that need to be addressed when I request this to be done?  The SP server is a production server.

Thanks.

If you install the WSP using the PowerShell commands, then the web.config will have a safe entry for the webpart added to it automatically. Your webpart is essentially a dll. I guess it's not too hard for someone to use something like Reflector to inspect your code, unless you have some code obfuscation.

You can build a setup package to install your solution. The setup package would need some custom actions for running the PowerShell commands to add/install, and uninstall/remove your solution.

Is your webpart a sandboxed or farm level webpart? If it's a sandboxed solution, then a site administrator can deploy it without needing a farm administrator, and without causing the webapplication to be recycled (because the web.config isn't updated for sandboxed solutions)