While Microsoft surrendered in the first round of its court battle with the U.S. Department of Justice (DOJ) Thursday, the software giant still faces a bigger challenge--determine whether it was in violation of its 1995 consent decree.

It is not about winning or losing," said William Neukom, Microsoft's senior VP for law and public affairs. "We are elated to get this behind us so that we can get back to the core issues in the case."

Of course, Microsoft's agreement to provide two versions of Windows 95--one with IE and one without--doesn't settle all their problems. On April 21, the court will hear Microsoft's appeal of the temporary injunction as well as its attempt to remove Lawrence Lessig as special master in the case. Meanwhile, the DOJ is still investigating other issues involving Microsoft, including Windows 98, which is due by the middle of the year. And more bad news came from Europe, where the European Commission, which regulates trade for the fifteen countries in the European Union, announced that it would press ahead with its investigation of the company. Numerous states in the United States are also moving forward with their own investigations of Microsoft's anti-competitive practices