AOL (AOL ) wants prime placement within Windows XP. Otherwise, it threatens to switch from Internet Explorer to its own Netscape Navigator. But that could alienate customers.
Microsoft (MSFT ) failed to get AOL to tie its popular IM to MSN's rival Messenger Service. Microsoft wants that tie to be a condition of the deal.
Microsoft wants AOL to offer its Windows media player. That would open a huge new market--but threatens AOL's partner on that turf.
AOL execs continue to lobby Congress about Microsoft's alleged anticompetitive conduct. Gates & Co. want AOL to forgo any legal action.