The states had wanted Microsoft to disclose more of Windows' internal mechanisms and to do so earlier in the manufacturing process, making it easier for outside programmers to design software that works as well with Windows as Microsoft software.
They also wanted to force Microsoft to offer a less expensive, stripped-down version of Windows so that computer makers could modify it and pass the savings on to consumers. And they wanted Microsoft to give away the code for its Internet Explorer browser and license a version of its Office suite of business productivity software -- which is more profitable than Windows -- for use on other operating systems such as Linux.
Lockyer said the states would discuss whether to appeal or file a new suit based on allegations the judge said weren't relevant in the remedy proceedings.
Others predicted that an appeal would fall short.
"I don't think there's a very substantial chance of succeeding on appeal," said Albert Foer, president of the American Antitrust Institute, a think tank favoring strong antitrust measures that had urged Kollar-Kotelly to craft a more sweeping resolution. "The appeals court already gave it a full shot, and my guess is the states are tired out."
Under the settlement, Microsoft is required to change some of its practices. But many antitrust and technology experts said what the large print gives, the small print takes away.
The deal makes it easier -- though not painless -- for PC makers and consumers to swap out Microsoft's Internet Explorer browser, media player and other functions for competing programs.
In practice, few home users have gone through the cumbersome process of downloading voluminous Microsoft updates that allow them to customize their desktops.
And there are limits to computer makers' rights to use their choice of "middleware," such as PC-based video players, that sit on top of the operating system and are in turn used to run smaller pieces of software, such as videos. To qualify for protection, some middleware firms must be shipping at least 1 million units annually in the U.S.
Over the states' objection, Kollar-Kotelly found that provision acceptable, ruling that Microsoft improperly used its power against potential threats to the dominance of Windows. She said less popular types of middleware would not clearly constitute threats.
Microsoft already has been taking steps to comply with the settlement, disclosing 272 internal interfaces governing how Windows works with other Microsoft programs for e-mail, Web browsing and the like.
It also has promised to disclose, via licensing agreements, 113 protocols controlling how the operating system connects with server computers running more powerful versions of Windows. Because the licensing agreements call for royalty payments, some open-source developers -- including those working on the free Linux operating system -- say they can't incorporate the protocols in their programs.
In addition, the company changed its pricing policy, setting uniform fees for the biggest 20 computer firms.
The most tangible result of the Justice Department deal has come from computer makers adding competing software. In October, Gateway Inc. said it would include the WordPerfect word-processing program made by Corel Corp. on some lower-priced desktop machines, after similar moves by Hewlett-Packard Co., Dell Computer Corp. and Sony Corp.
But the effect on Microsoft has been so slight that many say the company is more powerful now than it was when the Justice Department and accompanying states filed suit in 1998.
Microsoft's stock price is higher than it was at the start of the trial in October 1998. And the company's profit is nearly double what it was when the case began.
Rob Enderle, a technology analyst for the Giga Information Group in Santa Clara, said Microsoft archenemies Sun Microsystems and Oracle "are clearly disappointed" in the decision.
Still, he added, "there's a collective sigh of relief in Silicon Valley because there is now some legal certainty, and companies can get back to work."
Shiver reported from Washington and Menn from San Francisco.
Tough deal: Opponents acknowledge falling short. C1
(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)
Ruling at a glance
Highlights of U.S. District Judge Colleen Kollar-Kotelly's decision in the Microsoft antitrust case.
Overview: Approved almost all aspects of the federal settlement. The deal prohibits Microsoft from retaliating against computer manufacturers, allows customers to remove desktop icons for some Microsoft features and requires that Microsoft disclose some technical data to software developers.
Petitioners: Denied all stricter remedies requested by the nine non-settling states. Those states wanted Microsoft to allow users to remove some features from Windows, to divulge the blueprints to its Web browser and to let its Office productivity software be translated to other operating systems.