Microsoft

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and its foes were busy Tuesday, battling before a federal judge over a proposed settlement for more than 100 private lawsuits against the company.

Microsoft and its allies, including educators and economists, told U.S. District Court Judge J. Frederick Motz that a donation by Microsoft of mroe than $1 billion in software, hardware and support to the nation's poorest schools would be a fair and unique way of penalizing the software giant for alleged price gouging. But the software giant's enemies said the settlement proposal was little more than a veiled

attempt to get Microsoft further entrenched in the education software market.

"We're baffled that a settlement imposed against Microsoft for breaking the law should allow, even encourage, them to unfairly make inroads into education -- one of the few markets left where they don't have monopoly power," said

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CEO Steve Jobs, in a statement.

Apple filed a brief with the court Monday, objecting to the settlement's terms. "Today our schools have a choice, and to date they have chosen Apple around half of the time. We think our schools deserve to keep their power of choice, and our kids deserve better than having to learn on old, refurbished Wintel computers."

But a Microsoft spokesman said the proposed settlement would allow schools to choose what kinds of computers they want. Ironically, that could actually result in Microsoft giving schools money to purchase Apple machines.

"We respectfully disagree," says Jim Desler, a Microsoft spokesman. "This agreement and settlement was carefully developed and includes provisions which expressly address these concerns. There are elements of the education program that are platform-neutral and there's the ability, through this program and foundation for the schools to choose what software they want and for the schools to choose what hardware they want."

Microsoft stirred controversy a week ago when it unveiled the proposed settlement. Lawyers representing Californians who were suing the company said the settlement was developed behind their backs without their input, while other attorneys pitched the settlement as a win-win way to settle the case.

Hearings continued in the case late into the afternoon, and were expected to carry on into the evening. It was unclear when Judge Motz would make a decision regarding the settlement, which needs his approval to be binding.

Connecticut Attorney General Richard Blumenthal said he would not sign on to the separate settlement now being considered in the Justice Department's antitrust case against the company. Nine states have accepted that settlement, while nine others and the District of Columbia are forging ahead against Microsoft in the courts.

"I am concerned that this settlement simply has too many gaps and ambiguities that undermine the remedies necessary against substantial violations of law found by two federal courts," Blumenthal said in a statement. "The settlement reflects good progress but not good enough. Among my concerns are the need for a longer length of time, a stronger enforcement mechanism, and tighter anti-retaliation and disclosure provisions."

Since the settlement was announced earlier this month, critics have said it does too little to limit Microsoft's power over the market. The settlement calls for Microsoft to reveal more of the underlying code of its dominant Windows operating system so that other software companies can more easily write programs to run with it. It also calls for an independent team of monitors to have access to Microsoft's books and business practices for five years.

That settlement also must be approved by the judge in that case, Colleen Kollar-Kotelly, and is currently subject to a 60-day public comment period under a law known as the Tunney Act.

But Blumenthal also appeared to be attempting to gain more leverage over the company at the bargaining table.

"I am hopeful that we can continue discussions with Microsoft and enhance the settlement or reach a judicial result to ensure that competition is restored and consumers benefit," Blumenthal said in his statement.

Vivek Varma, a Microsoft spokesman, said Blumenthal's objections are nothing new in the case, and would not say whether the company is negotiating with any of the remaining, objecting states.

"There's a process in place under the Tunney Act, and with the states that have settled. On a parallel track, there's also a remedy phase with the states that have not settled, and that process is continuing as well," Varma said.

Those nonsettling states are expected to file additional documents in the case Dec. 7.

Lastly, Microsoft said it is waiving its right to a hearing in front of the European Commission concerning the EC's own pursuit of the company over alleged antitrust violations. Varma said the company has submitted its case in written documents, and doesn't feel the need to make a formal presentation, which had been scheduled for late December.

"We feel the papers do a just job of defining our position, and I think we feel comfortable where that is," Varma said. "The next step is to pursue any discussion to resolve it short of any future proceedings."