Apparently it wasn't so much of a happy ending for Zeke's Gallery's blog and the gallery owner with the big ego and lawyer friend. After apparently being reassured that a simple pronoun confusion was at fault for a misunderstanding, it turns out he wasn't satisfied.
Now other blogs are taking notice and calling on the world to blog about how this guy sucks and bloggers are under attack from evil lawyers.
The lesson in all this is that in the eyes of the law, blogs are no different from major newspapers. Both are responsible for their words and subject to libel law. Of course, the main reason bloggers don't tend to get sued as much (besides the relative lack of readership) is that they don't have very deep pockets. I learned that as editor of The Link.
The flip side is that for these small bloggers, it's cheaper to give in to demands than hire a lawyer to fight even the most frivolous charges.
It's not so much a blogging issue. It's a problem with the justice system.