I still think every quarrel in the gaming industry should be solved by playing games. Notch mentioned about playing Quake to determine the outcome of the whole "Scrolls" thing with Bethesda a few months back. Shit like that should be the way forward. Best of Valve vs the best of Blizzard in a winner takes all DotA tournament. If Blizzard win Valve changes the name. If Valve wins they get to keep it.
You could take this principle in to other mediums as well. Take the music industry for instance, the amount of people that bitch and whine about how "this band stole my riff" or "that band is using the same chord progression as my song" bull shit (I'm looking at you Joe Satriani, yup as much as I dislike coldplay, them using as tune similar to one of your riffs is hardly worth a law suit, there are more examples but I can't think right now). Anyway crap like that could be easily sorted that out with a guitar battle.
Anyway I'm getting slightly off topic but if you want to have a read through of the appeal you can here. From the law side of things I would probably be on Blizzards side as the name has always been associated with them and they have accepted the mod as one of there own. I can't see it going anywhere as it was a fan built project and not actually owned by Blizzard.
From a gamers perspective however, I couldn't honestly give a shit what the game is called so long as it's a decent game. So my message to all those throwing lawsuits about in the gaming industry is fuck off and get back to developing video games. At the end of the day Valve could just easily change the name and this could all be over saving people a lot of time and money. The game would still be exactly the same except they'd have to think of a new name and logo. But as I said before I honestly couldn't give a crap about the name, it doesn't matter.
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