I just learned of this case. I would say he didn't have his domain name taken away, but voluntarily gave it up when he chose to settle (for an X-box...). I've always found it a disappointing aspect of lawsuits that they end up in settlements so often, this would have formed an interesting precedent since he might have had good chances of winning the case (real name, no intention of deception). Shouldn't there be some kind of rule that prevents lawsuits from being settled when it's in the public interest or in the interest of justice?
Ah, the halcyon days of the Internet's adolescence.
This was before fiascos like Mike Rowe, of Canada, having his mikerowsoft.com taken away.