I haven't found out yet what happened with it.
Here's a 2010 update, in which the corporate restructuring interacted with the pre-existing lawsuit:
[ But look! More lawsuits!
And perhaps most interesting of all, finally a class-action against the publishers and Apple:
Geekwire is considerate enough to include a pointer to the press release and filing.
Recently, Liberty Media offered to buy B&N, and then wound up putting a bunch of money in and getting a couple directors on the board. Who is Liberty Media? Well, you can read the wikipedia entry as well as I can. More importantly, here's the CEO:
"Malone is now the chairman of Liberty Media  and CEO of Discovery Holding Company."
And Discovery Holding Company bears some close but non-identical relationship to Discovery something-or-other of the patent lawsuit.
Let the wild and unfounded, rampant speculation begin.
ETA: To add to the fun:
And coverage from BEA on Amazon becoming a publisher and looking for someone to do print versions of books born digital, while Malone was trying to buy B&N.
Malone owns more land than Ted Turner -- and he's more on the forestry end of things. Not really surprising.