Well, I didn't have to wait long for an answer!
Here it is officially; the US has dropped plans for any changes in foreign ownership for US airlines, which means that Open Skies is pretty much dead for now and is likely to remain so for the duration of this Congress.
The next move is up to the EU Commission. I'd try and predict the logical move, but logic and the Commission have never been happy bedfellows ...
http://www.rte.ie/business/2006/1205/airlines.html