Blizzard is most certainly not losing. According to BBC News (among other sources), they just won $6 million from MDY Industries, which is less than what was expected of them. This isn't their first victory in the war, but it's the first involving money. Blizzard could still appeal the ruling, so it may not necessarily be over, though I personally think the point has been made as far as damages. There are still further chapters in the story that await, because they'll be in court again in January of 2009 to resolve further issues.
This entire debacle is the perfect formula to rally people on MDY's side here on the internet. Blizzard is Goliath, and MDY is David. People are, generally, going to be on the side of Glider's makers just because siding with the little guy feels more familiar. Personally though, I feel like MDY Industries just got what was coming to them. They broke WoW's Terms of Service, enabled thousands of others to do the same, and they cast the first stone when it came to the lawsuits. They were pretty much begging Blizzard to crush them underfoot. They were doing a jig around the room singing, "You can't touch me, you can't touch me!" and then Blizzard backhanded them across the face.