The unsettling states' brief triumph over modular Windows evaporated yesterday evening, when their legal team abandoned plans to stage a demonstration by testing consultant James Bach. California assistant attorney general put a brave face on the switch, claiming that the case against Microsoft was strong enough, and didn't need Bach's evidence, but earlier events in the courtroom tell an entirely different tale - essentially, the states' attorneys fouled this one up, handed Microsoft's legal team enough weaponry and more derail them, and then found themselves with no choice other than surrender.
Bach was retained by the states in February, and has been working on modular implementations of Windows, based on XP Embedded, since then. According to the states' attorneys the initial intent in hiring him was to provide them with background information to use during the case. The decision to actually call him as a rebuttal witness was only made recently, and the request itself was made this week. After consideration, Judge Colleen Kollar-Kotelly agreed, but this victory for the states turned out yesterday to be one they couldn't take advantage of.
News source: The Register - States' team blows foot off over modular Windows demo