On Saturday, the Washington Post reported that America Online was in negotiations to buy Linux manufacturer Red Hat – leading to lots of talking heads speculating about the possibility that AOL would make a head-on assault against Windows on the desktop.

Today, America Online denied the reports in particularly vigorous terms. When talks are really going on but folks want to stay private, the denials are usually guarded. Today AOL seemed rather certain that the whole thing was imaginary.

In other news, you’ll recall that Kazaa (the company behind the FastTrack software that powers the most popular file swapping services – MusicCity, Kazaa, and Grokster) was ordered by a Dutch court to halt file transfers. For the last week, it voluntarily halted downloads of its software – although anyone with a working copy could continue to trade files, since the software is decentralized and Kazaa was powerless to “turn off” the file sharing.

Yesterday a brief announcement confirmed that Kazaa had transferred ownership of its web site, software, and logos to a privately held Australian firm. And nobody has a clue as to what’s going on. Is this an escape from the Dutch court? An attempt to delay or avoid the litigation by the copyright police that was threatening Kazaa? The death of Kazaa? Nobody knows. Although as you might guess, an almost complete lack of knowledge hasn’t slowed down the speculation a bit.

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