Microsoft has reached a final resolution in an Xbox 360 lawsuit regarding the Fall 2006 software update which resulted in faulty Xbox 360's. The two sides have agreed to dismiss the case with one layer confirming that the case been settled but the terms of settlement are to remain confidential.

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Microsoft hasn't said specifically what has caused the broader hardware problems. It also hasn't drawn any direct connection to the Fall 2006 update, except for acknowledging that the initial release did cause some hardware problems.

The settlement of the Ray lawsuit isn't the end of the Xbox 360 litigation. In particular, Microsoft has recently been the subject of several suits over alleged disc-scratching by the console. Ray's lawyer, Kaplan, is also representing a plaintiff in one of those cases.

I've asked a Microsoft spokesman for comment on the resolution of the Ray case, and I'll update this post if the company has anything to say.