The two companies had submitted simultaneous lawsuits against each other when Creative claimed that Apple infringed upon it's patent for the iPod interface.
In the agreement, Apple is essentially paying for a software license for use of the interface in it's devices. In return, Creative will now be allowed to produce and sell products and accessories designed for the iPod.
Apple pioneer Steve Jobs had this to say, "This settlement resolves all of our differences with Creative, including the five lawsuits currently pending between the companies and removes the uncertainty and distraction of prolonged litigation".
Source:
BBC
Written by: Dave Horvath @ 24 Aug 2006 6:49