Expect Microsoft's(Nasdaq: MSFT) Bill Gates and Steve Ballmer to kick back a drink or two in celebration this weekend. U.S. District Judge Colleen Kollar-Kotelly ruled that the Justice Department's settlement with Microsoft is punishment enough for the software company. In doing so, Judge Kollar-Kotelly rejected the proposed harsher settlement wanted by nine states: a so-called "modular" version of Windows that would allow computer companies to remove Internet Explorer and the other programs in question.

This is a huge win for Microsoft, and may be the decisive step toward putting this mess behind it. This is the outcome the company and the Justice Department wanted. Microsoft has already implemented some of the remedies from the Justice Department's settlement, so material changes to the company's business won't be necessary. Judge Kollar-Kotelly made only one change to the settlement, requiring the company to disclose some sensitive technical information to competitors a few months ahead of schedule. Big whoop.

Had the ruling gone the other way, Microsoft most certainly would've appealed and remained mired in this for even longer. Of course, we mustn't overlook the fact that some very angry attorneys general will likely appeal, so it's not over yet. However, given that Judge Kollar-Kotelly gave the states their own special hearing, and then took months to make her decision, many legal pundits think lengthy, drawn-out appeals from the states won't be tolerated.