The Browser Wars wage on and on, with the stakes rising ever higher. (If you don't believe us, take a gander at Don Crabb's Doomsday Scenarios over at MacCentral, which include the collapse of the international software market and the U.S. slipping from the top of the technological ladder.) But today marked two big events in the chronicles of the battle. The first was Microsoft's out-of-court settlement with the Department of Justice regarding the interpretation of Judge Jackson's preliminary injunction, as reported by Bloomberg News.

In today's scheduled episode of "Redmond Justice," Microsoft and the DoJ were supposed to square off in closing arguments over whether or not the software company should be found in contempt of court for violating last month's temporary injunction, which ordered Microsoft to ship Windows 95 without Internet Explorer until the issue had been further researched and a final verdict could be made. In a surprise plot twist, however, today we saw Microsoft settle out of court with the DoJ and agree to ship a current version of Windows with the browser disabled. Whether or not any other penalties were invoked is unclear, but it would appear that Microsoft managed to squeeze in an extra five weeks of forced bundling while avoiding the $1 million-a-day fine for contempt. (No one ever said they weren't savvy businessfolk.)

What does this mean to the overall case? Justice thinks the settlement is significant because it can be construed as Microsoft's acknowledgement that the operating system and the browser are separable, and therefore separate. The crux of Microsoft's argument has been that IE is just another feature of Windows 95, and not a separate application; this settlement could hurt that defense. But in the end, what else would Microsoft have done? It was plainly obvious that the judge was going to side with the DoJ on this issue, so finally agreeing to comply seems to have saved them some $35 million. It's all about smart money...

The second big event in the Browser Wars today was Netscape's announcement that it will be giving away its client software. Navigator and Communicator are now free. ("Weren't they always?" asks the guy who never reads README files or license agreements. No, you dork.) Details are available in a ZDNet article.

The decision to give away their software comes hot on the heels of Netscape's recent dismal quarterly results, which led to a layoff of some 400 jobs. Netscape's financial woes were due to a single entity-- Microsoft, who's been giving away Internet Explorer for years now. What better way to recapture market share than to fight fire with fire? But Netscape goes even one better; they're also going to give away the source code to their browsers to any developer who wants to see it. That decision is probably even more significant than the decision to make the browser free; soon, anyone who wants to can adapt Netscape code for their own browsers and other internet products.

So in one day, suddenly Microsoft is shipping Windows 95 without Internet Explorer, and Netscape is giving away its browser. When we look back on this in a year, will we remember this as the day that the tables turned? After years of Microsoft chipping away at Netscape's market share, these developments may mark the turning point that will change the state of browser competition forever. Remember, Netscape's source code will be available to anyone for free-- we bet there will be a lot more browser choices in a year's time, putting an end to the two-party system of Microsoft and Netscape. (Opera's our best bet for a Perot-like wildcard.) Does this mean that we might see a Navigator part for CyberDog after all?

Well, how about that? MacOS Rumors has posted comments from an adventurous reader who decided to run the recently-released Mac OS 8.1 installer on his copy of the Rhapsody Blue Box (the Mac OS 8.0 compatibility layer). While the installer itself simply stated that it wouldn't work on the machine in question and then quit, through a little creative trickery, this guy was eventually able to update his Blue Box to Mac OS 8.1.

That speaks well for the Blue Box's compatibility; most likely, as new versions of the Mac OS ship, the Blue Box will follow suit. But the really fascinating part is that Mac OS 8.1 seems to make the Blue Box faster. And not just faster than the Mac OS 8.0 Blue Box-- faster than Mac OS 8.1 running natively on the same Mac. In addition, everything this guy runs in the Blue Box (like Photoshop and Netscape) just works.

Remember, folks, this is a developer release. There's still months to go before the first customer release of Rhapsody, yet already the Blue Box sounds rock-solid and speedy beyond our wildest expectations. Yes, Rhapsody's being positioned as a high-end and server OS, but it's already looking like a great replacement for the Mac OS. Exciting!