Here are three methods

1. Use the fonttools as described in the url http://www.typophile.com/node/102671
2. Use ttx. First execute ttx -t OS/2 fontname.ttf (or otf); that produces a small file named fontname.ttx containing only the OS/2 table; you then replace with a text editor the value given at the line <fsType value="00000000 00001000"/> (the value you get is probably different) by the value you want; you then finally execute the command ttx -m fontname.ttf fontname.ttx to get your new font.
3. Buy DTL OTMaster to edit the OS/2 table; we are told the font is left otherwise untouched. If it is not, you tell us.

I try to find a way to avoid using command line. It is strange MS didn't update their tool since 1997...
There are many fonts waiting to change that flag (all are my fonts) .

It is clearly written in the Microsoft link http://www.microsoft.com/typography/property/fpedit.htm

Embedding - embedding permissions may be made more restrictive.

An update would not help you unless they changed their mind about that.

By the way SIL is also using line commands. They have a command hackos2 in their impressive list FontUtils of font utilities (that I have never tried).

Thank you so much.

There's embed, which seems to do exactly what you want:
http://carnage-melon.tom7.org/embed/

With regard to embed.exe I would verify with Font Validator, that the checksum is correctly computed. As far as I remember, there is a tool, that does not compute the checksum correctly. I think, it was embed.exe.

I try to find a way to avoid using command line. It is strange MS didn't update their tool since 1997...
There are many fonts waiting to change that flag (all are my fonts) .

You can easily do it with TTX, a batch file and the search and replace function of UltraEdit. TTX correctly computes the checksum.