gogetter... I'm no lawyer, but this is my understanding. As most of us would know, you can only ask job specific questions during an interview. You can't ask if they're married, have kids, handicaped, etc. But you can ask, "is there anything that will prevent you performing the job as it has been explained to you?" If they say their child care concerns may be a scheduling issue, they've opened the door to that discussion. You didn't ask specifically. They made it relevant.
On the reference side, as a previous employer you should always ask for a release form before sharing any information. I won't talk to someone unless they fax/mail an authorization for release of information from the former employee. When I call on someone, if they don't require it, it's not my problem. I'll ask away. The burden is on them to draw the line on what they're willing to talk about. Some people won't talk about much of anything, other than answer yes/no questions. Maybe a little gun shy with all the lawyers out there. Regardless, you can ask, and if told, I don't see the harm in finding out the reasons why the company wouldn't hire your applicant again. Certainly I would keep the questions job specific, but I wouldn't be too concerned with the exact words.
Lawn Lad, Inc.