You can read this on the blog of Second Life now:
Linden Research, Inc., Philip Rosedale, and Marc Bragg have agreed to settle the “Bragg v. Linden and Rosedale” lawsuit currently pending in the U.S. District Court for the Eastern District of Pennsylvania. The parties agree that there were unfortunate disagreements and miscommunications regarding the conduct and behavior by both sides and are pleased to report that Mr. Bragg’s “Marc Woebegone” account, privileges and responsibilities to the Second Life community have been restored. For the benefit of the Second Life community, the Parties have mutually agreed that the terms of their resolution shall remain confidential. The Parties ask that this confidentiality be respected.
So this is lawyer speak. What does that mean in real speak? Something like this from Lindenlabs point of view: we would have lost the case! So better agree to restore Braggs' account and properties in world and see if this is enough for him to drop the case before our roof really starts to burn and we're losing big money!
It's that easy.