The June 25th release date of Windows 98 is still a go, but Microsoft delayed the shipment of Windows 98 code to hardware manufacturers until Monday so that it could hold last minute talks with the Justice Department and U.S. states that are rallying against it. Microsoft had originally planned on finalizing Windows 98 code Friday, but it will now wait until after the weekend.

Microsoft lawyers say the company has offered "major concessions" to the DOJ and states, though no details are immediately available. The official line out of Redmond on Thursday morning was even more cryptic.

"We have yet to hear from them that there is a case being filed,” said a Microsoft spokesman on Thursday morning, “and we’ll continue to provide them with the information they need, and continue our constant dialogue.”

By mid-afternoon, however, the company confirmed that it had "agreed with the Department of Justice and state attorneys general not to release Windows 98 to computer manufacturers until Monday. The company confirmed it has taken this step in order to continue discussions it began with the government more than a week ago. The company said it still plans to make Windows 98 available to consumers on June 25," Microsoft said in a statement.

Sources say that Microsoft will sit down with its foes on Friday and attempt to hammer out a deal