When asked about what the international community would think, he said: "Let them talk. Are they happy with our God? Are they happy with our Prophet? Are they happy with our leaders? Never, so why should we bother what they say about us?"
He added: "I would be more worried about what you (Pakistani journalists) say about me, not what Bush says or what Dick Cheney says. I don't damn care."
Dr Khan must still give 48 hours' notice if he wants to leave Islamabad but he said on Friday that he had no plans to go abroad or to go into politics.
Dr Khan, the former head of Pakistan's nuclear programme, said he would use his freedom to concentrate on educational projects.
He added: "All this has happened because of the keen interest taken by the president, the prime minister and especially [Interior Minister] Rehman Malik, who has looked into the case, reviewed it, discussed it with the government, discussed it with the concerned authorities."
Pervez Musharraf denied any knowledge of nuclear secrets transfers
Dr Khan's wife said she would wait to see how and whether the court's judgement was executed.
Over the past year, the government has eased some of the restrictions on Dr Khan. It says those that remain are for his own security.
The BBC's Barbara Plett in Islamabad says that despite Friday's ruling Dr Khan's proliferation activities still arouse international concern, although Pakistan regards the case as closed.
US State Department spokesman Gordon Duguid, speaking on Friday, said Dr Khan remained "a serious proliferation risk".
"The support that Khan and his associates provided to Iran and North Korea has had a harmful impact on... international security and will for years to come," he said.
In January, the US imposed sanctions on people and companies linked to Dr Khan.
Last July, Dr Khan told the media that Pakistan had transported uranium enrichment equipment to North Korea in 2000 with the full knowledge of the country's army, then headed by Gen Musharraf.
The former leader has repeatedly stated that no-one apart from Dr Khan had any knowledge of the transportation of nuclear technology.
Dr Khan is seen as the father of Pakistan's nuclear industry and is still regarded a hero by many in the country.
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